Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

GREATER LONDON COUNCIL (MONEY) BILL (By Order)

GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)

Orders for consideration, as amended, read.

To be considered upon Thursday.

CITY OF LONDON (VARIOUS POWERS) BILL (By Order)

Order for consideration, as amended, read.

To be considered tomorrow.

Oral Answers to Questions — SOCIAL SERVICES

Community Homes

Mr. Kilroy-Silk: asked the Secretary of State for Social Services what steps he is taking to increase the resources available for community homes and schemes for the care of children in the community so that they will not have to be remanded to prisons.

The Under-Secretary of State for Health and Social Security (Sir George Young): Expenditure on facilities for children remanded into care is the responsibilty of local authorities. It is for each local authority to decide, in the light of its own needs and priorities, how to deploy the resources available to it. We are continuing to make available in the current financial year £2 million for capital grants to local authorities for the provision of secure accommodation.

Mr. Kilroy-Silk: Will the Minister say, first, when sufficient resources will have been provided both in community homes and in alternatives in the community so that we no longer have the despicable practice of remanding children to prison establishments? Secondly, will the hon. Gentleman accept that it is far more constructive and sensible to deal with difficult and recalcitrant children in the community or in community homes than to mess about with this nonsense of so-called short, sharp sentences?

Sir G. Young: I share the hon. Gentleman's general view that it is better to try to deal with children in the community than in institutions. In response to his specific question I can tell him that at present there are 86 secure places available for boys on remand and that a further 108 places are under construction.

Mr. Dubs: Does the Minister accept that his answer to my hon. Friend's original question will not bring much comfort to local authorities when they face enormous cuts in expenditure, and that it will be difficult for them to make the right sort of provision for these children?

Sir G. Young: The Government's recent call for reduction in expenditure by local authorities means that they have to review their priorities. However, a recent circular has made clear the priority which we attach to law and order services, and we are prepared to regard secure accommodation and other facilities for children remanded into care or found guilty by the courts as an integral part of the national pattern of those services.

National Health Service (Merseyside)

Mr. Parry: asked the Secretary of State for Social Services what is the estimated number of job losses on Merseyside following proposed spending cuts in the National Health Service.

The Minister for Health (Dr. Gerard Vaughan): National Health Service expenditure in Merseyside is not being cut.

Mr. Parry: Is the Minister aware of the strong concern and anger being felt


by trade unions about the proposed cuts? I am informed by union representatives that the proposed cuts will affect especially the training hospital which has been opened recently. Can the Minister assure the House that there will be no partial closures in local hospitals, particularly at the new Royal Liverpool hospital?

Dr. Vaughan: Temporary closures are a matter for the local health authorities. An additional £5 million has been allocated to the Mersey regional health authority this year, but that is likely to be offset by the constraints on cash limits. I remind the hon. Gentleman that the decision not to fund in full the costs of additional pay settlements, for example, was taken by the previous Administration.

Mr. Steen: Will my hon. Friend remember that when he creates changes in the National Health Service the professionals working in the Service should be involved in the decision-making process, and that it should not be left to the bureaucrats and administrators to do it on their own?

Dr. Vaughan: We are well aware of this, and I remind my hon. Friend that this underlies the Conservative health policy, which is to reduce bureaucracy in a way which will allow the money available to be used to provide medical care for patients.

Mr. Orme: How can the Minister say that there will be no cuts when Merseyside will have to take its share of the £100 million cuts proposed by the Government?

Dr. Vaughan: Apparently the right hon. Gentleman has failed to understand the statement which I made just now. The Mersey region has been asked to meet £1·3 million of the excess costs of pay awards, but the region is getting £5 million of additional alocated resources. This money will offset the extra costs resulting from pay awards and value added tax.

Regional and Area Health Authorities (Services)

Mr. Race: asked the Secretary of State for Social Services if he will list the reductions in manpower and services to patients in each regional and area health

authority which will flow from the Government's refusal to finance the whole of the Clegg pay awards for ancillary staff and ambulancemen.

The Secretary of State for Social Services (Mr. Patrick Jenkin): Since the Government have not refused to finance these Clegg awards, the question is misconceived.

Mr. Race: Is it not true that the financing of the awards is to be reduced by the Government by £22 million even though they have said that they will implement the findings of the Clegg report for ancillary staff and ambulance men? Is it not also the case that this will form part of the £100 million shortfall in the cash limits, which will mean substantial reductions in the National Health Service in every area and regional health authority in the country? Did not the Chancellor of the Exchequer cynically and deliberately mislead the House when he said in his Budget Statement that there were to be no cuts in the National Health Service? When will the right hon. Gentleman, as a spending Minister, make clear to the mad monetarists at the Treasury that he is responsible for the National Health Service and needs more finance?

Mr. Jenkin: On the funding of the Clegg awards, the Government are adhering precisely to the policy of their predecessors, on which the hon. Gentleman fought the last election.

Mr. Paul Dean: Will my right hon. Friend do his utmost to ensure that this pay award and others in the future are firmly tied to no-strike agreements so that patients do not have to suffer the inconvenience and hardship that occurred last winter?

Mr. Jenkin: I believe that all parties in the House and in the Health Service are as anxious as I am to avoid any repetition of the events that struck the Service last winter. These are matters for the Whitley Councils to come to terms with. I hope that when they embark upon negotiations in the next pay round it will be possible to make some advance in the direction that my hon. Friend wants.

Mr. Ennals: Does the Secretary of State accept the conclusion of the letter


from the chairman of the South-West Thames regional health authority that the squeeze imposed by the Government as a result of their Budget may lead to a doubling or a trebling of waiting lists and the closure of wards and hospitals on a scale not seen before? Is the right hon. Gentleman aware that I have just come from the Westminster hospital, where I was told that 10 wards are due to close as a result of the squeeze imposed by him? When will he come clean with the House and the country?

Mr. Jenkin: I have made clear that the policy of the Government is exactly the same as that of our predecessors, both on the funding of the Clegg awards and the offset of £23·4 million which the right hon. Gentleman announced before the election, and the fact that we were asking health authorities to abide by the cash limits laid down by the previous Government. As I said in the debate in the House recently, this will lead to a squeeze on cash limits overall of between £90 million and £100 million. This means that health authorities will need carefully to review their priorities in the current year. Neither the National Health Service nor any other part of the public sector can escape the logic of the proposition that the more that is taken out in pay, the less there is for everything else.

Mr. Bruce-Gardyne: Now that the public service unions have embraced the principle of comparability as their byword, is it not time to point out to all those employed in the Health Service and elsewhere in the public sector that, as in the private sector, there must be some trade-off between the level of settlements and the scale of employment?

Mr. Jenkin: My hon. Friend is absolutely right. This is a matter which I would expect the management side of the Whitley Councils to point out to the staff side during pay negotiations.

Mr. Moyle: Is it not clear that the circular issued by my right hon. Friend the Member for Norwich, North (Mr. Ennals) on 11 April is a light age away from current circumstances in view of the heavy burdens that this Government, by their own decision, have placed on the Health Service in the last two or three months? Will the right hon. Gentleman

now give a clear undertaking that his Government will meet the pay rates of the Clegg award for the existing labour force? Otherwise, he will be laying a further burden on the National Health Service. The right hon. Gentleman is prepared to consider paying 35 per cent. extra to the doctors over the next few months. Why not treat the ambulance-men and the ancillary workers in the same way? Or are we to regard the Prime Minister's speech at Beeston on 18 April, when she promised to keep the National Health Service fully funded, as a cynical exercise in electioneering?

Mr. Jenkin: It is interesting to recognise that the right hon. Gentleman's party would perhaps not have honoured the findings of the doctors and dentists review body to which, we understand, it had committed itself before the election. No doubt the medical profession will take note accordingly. I have made clear that additions to cash limits will be provided for the purpose of funding acceptable awards. The arrangements for this have been stated many times in the House.

National Insurance Regulations

Mr. George Robertson: asked the Secretary of State for Social Services if he is satisfied with the way in which national insurance regulations affect the pay of those in the hotel and catering industry.

The Minister for Social Security (Mr. Reg Prentice): Yes, Sir. Employees in the industry are treated no differently from those in other industries who receive gratuities as well as wages. Their earnings are liable for class 1 national insurance contributions but gratuities distributed independently of the employer do not count as earnings for this purpose.

Mr. Robertson: Is it not ironic and scandalous that by not applying the national insurance levy to gratuities earned by workers in the hotel and catering industry not only does the Exchequer lose many millions of pounds that would normally be contributed to it but some of the lowest paid workers in the community lose in the short term through a lack of entitlement to earnings related benefits in sickness and unemployment and lose at the end of their poorly paid working lives by a reduction in the occupational pension that they will have earned?

Mr. Prentice: There is some merit in that argument. These are real problems. The practical difficulty is how to measure payments that the employer does not handle and does not distribute. I should have thought that if employees in these industries wanted a change their unions might want to negotiate a different method of payment that would make it easier for the national insurance system to accommodate the problem that has been mentioned.

Sir Bernard Braine: Has my right hon. Friend's attention been drawn to the appalling story in today's Evening Standard about Italian drop-outs in London who are drawing full social security benefits but have no intention of working in the hotel, catering or any other industry, and who are openly boasting that they are permitted to cheat the system? What is my right hon. Friend doing to stop an abuse that is undermining the interests of genuine, legitimate workers in these industries?

Mr. Prentice: I have noticed that report. The question before the House concerns contributory benefits, which would not be available to newcomers to this country. It is the intention of the Government to be much tougher in dealing with abuses of the system than has been the case in the past.

Dr. McDonald: Since the Minister has expressed concern about abuse, what action will he take about the abuse perpetrated by employers in the hotel and catering industry, and in the construction industry, who either fail to pay national insurance contributions on behalf of their employees or do not pay enough?

Mr. Prentice: It is an offence not to pay contributions, and the Department is constantly chasing up cases of people who fail to do so.

Mr. Rooker: Is the Minister not aware that at least one worker in London—a former employee of Simpsons in the Strand—is losing unemployment benefit because that company, contrary to what it told the Inland Revenue, was not paying proper national insurance contributions and has told untruths to his Department, which is now investigating the matter. Is the right hon. Gentleman not aware of the consequences of what em-

ployers are doing in these rip-off industries, namely, depriving workers of future pension rights, unemployment rights and redundancy payment rights? He must be more positive about this problem.

Mr. Prentice: I am aware of the case that the hon. Gentleman mentions. The matter is before the Secretary of State for what is in effect a quasi-judicial decision under the original legislation, and I cannot therefore comment on the matter in detail. If our consideration of that case and our decision on it help to point to a solution to some of the genuine problems that have been raised in questions today, we ought to reconsider this matter.

Hypothermia

Mr. Bowden: asked the Secretary of State for Social Services what steps he is taking to protect elderly people from the risk of suffering from hypothermia in the coming winter.

Mr. Stallard: asked the Secretary of State for Social Services what new steps he is taking to protect elderly people from the risk of suffering from hypothermia in the coming winter.

The Under-Secretary of State for Health and Social Security (Mrs. Lynda Chalker): Authorities and practitioners in all disciplines are well aware of the need to be alert to the possibility that some elderly people may suffer the effects of cold and to be ready to take appropriate action.

Mr. Bowden: Is my hon. Friend aware of recent research which shows that up to 500,000 elderly people could be at risk this winter? Will she stress to the Secretary of State for Industry the importance of introducing a fuel discount scheme to include not only electricity, which was all that was provided by the previous Government, but solid fuels, gas and, above all, paraffin?

Mrs. Chalker: I am grateful to my hon. Friend. We are aware of the research. However, there is at present no firm evidence that the incidence of hypothermia is high. We know that many people feel the cold intensely, and action must, therefore, be taken. The electricity discount scheme is a matter for my right hon. Friend the Secretary of State for Energy. I assure my hon. Friend that I


am in close touch with my right hon. Friend on all the matters that he mentioned.

Mr. Stallard: Does the Under-Secretary of State agree that there is no substitute for an adequate living pension that will relieve pensioners of the fear, worry and indignity of this annual exercise? Is the hon. Lady aware that last year 600 death certificates gave hypothermia as a possible reason for death? That was an increase over previous years.
In addition to taking the action recommended by the hon. Member for Brighton, Kemptown (Mr. Bowden), will the Under-Secretary of State recommend to the Cabinet the abolition of the standing charges on all heating and heating appliances for pensioners who live alone?

Mrs. Chalker: The bitter winter led to hypothermia appearing as the underlying cause of death on 20 death certificates. It was mentioned as a subsidiary cause on about 600 further certificates. Last winter was one of the harshest for many years. In the uprating this year we have increased the heating addition for pensioners. I shall bring the hon. Member's comments to the notice of my colleagues.

Mr. Maclennan: Will the Under-Secretary of State prevail upon her colleagues to reconsider the decontrol of the price of paraffin, which will ration paraffin by price and deprive the neediest members of our community of the fuel on which they will most rely this winter?

Mrs. Chalker: This is a matter for the Department of Energy. All the effects of price increases in whatever fuel an elderly person uses are being carefully considered. I note what the hon. Member says.

Mr. Freeson: Is the Under-Secretary of State aware that the House will not be satisfied with her rather generalised answers? The original question asked what steps the Secretary of State was taking. Is it not possible for the Government to take action under the Homes Insulation Act, which has been operating for 12 months? Is it not open to the Government to introduce a scheme of special assistance to elderly people who are suffering and who are at risk?
Is it possible for the Government to take action on the report published by the Department of the Environment

entitled "An Exploratory Project on Heating for the Elderly", on which consultations were proceeding when the general election was called? That report described ways in which many elderly people could be assisted under the Homes Insulation Act. Why cannot action be taken before the winter?

Mrs. Chalker: The Act enables local authorities to give grants towards the cost of home insulation. It limits the grant to 66 per cent. of the total cost and a maximum of £50. Obviously, there are other things that we must do to help the elderly. Local authorities are also able to provide help to elderly people who are in need. The Supplementary Benefits Commission is prepared to pay extra lump sums for heavier curtains and simple draughtproofing. We shall be examining what can be done further to help elderly people who may be in need because of the severity of the cold and the cost of fuel.

Mr. Freeson: The hon. Lady has got the Act wrong. There is a scheme such as she described, but is she aware that the Act allows the Government, with parliamentary approval, to introduce new schemes of special assistance of a different kind? Will the Government take action on the report to which I referred?

Mrs. Chalker: The right hon. Gentleman will be aware that the operation of that Act is a matter for the Department of the Environment. I accept that the right hon. Gentleman has more knowledge of this than I do, and I shall examine all that he has said. He may be assured that I shall not rest when it comes to a question of helping elderly people who may suffer from the cold this winter.

Child Benefit

Mr. Meacher: asked the Secretary of State for Social Services when he expects next to increase the rate of child benefit.

Mr. Patrick Jenkin: I must ask the hon. Member to await future announcements. I have no plans for making such an announcement in the immediate future.

Mr. Meacher: Does the Secretary of State accept that the Government's failure to uprate child benefit, apart from the


puny 50p for one-parent families, will increase the disincentive to work and enlarge the biggest single group in poverty—poor families with children? Does the right hon. Gentleman accept that the utterly indefensible proposed public expenditure cuts will hit poor families hardest? Does he accept that it is his responsibility to resist those cuts and to fight to uprate regularly those benefits that will most reduce poverty?

Mr. Jenkin: I share the hon. Gentleman's desire to help poor families with children. That is why, next November, there will be increases in the child additions for families, the heads of which are unable to work, those who are sick or unemployed and parents who are widowed or earning low wages. They will be helped by the uprating of the family incomes supplement. Lone-parent families will be helped by the 20 per cent. addition to the child benefit increase.
In view of the warm welcome with which that increase was received by organisations representing lone parents, the hon. Gentleman's description of it as "puny" is a little unworthy.

Sir Brandon Rhys Williams: Does my right hon. Friend agree that there are overwhelming advantages for the economy, as well as for the families concerned, of paying the same level of child benefit, as of right, to the children of those who are in full-time work as we pay to the children of families of which the head is an invalid or unemployed?

Mr. Jenkin: As a statement of the ideal, I cannot fault what my hon. Friend said.

Mr. George: Does the Secretary of State agree that many families will be delighted to receive the existing rate of child benefit, in view of the industrial dispute? Is he satisfied with the emergency payments system in his Department? Has there been any publicity about it? Will he have a word with the chairmen of the nationalised fuel industries and ask them to be gentle in their policy of cutting off supplies to parents who have not been receiving child benefit? Is he aware that child benefit not being paid can mean the difference between paying and not paying a bill?

Mr. Jenkin: I am grateful for the hon. Member's recognition that the problems are due to the industrial dispute and are not, as one of his hon. Friends said, the result of a Scrooge computer, which seemed to be a strange concept.

Mr. Heffer: It was operated by a Tory.

Mr. Jenkin: The problems of the child benefit centre at Washington arose during the five-week strike which ended on 1 May. The computer was out of operation during that time. Since 20 June the staff have been operating a ban on overtime, which has prevented them from catching up on the backlog that arose from the strike.
About 98 per cent. of the families who are entitled to child benefit are being provided with a full service, and the regular renewal of books is being carried out. However, I recognise that there is a backlog that has caused some families to wait for weeks and months. I am grateful to the hon. Member for Walsall, South (Mr. George) for his suggestion about the fuel industries.

Mr. Peter Bottomley: At what times of the year is it possible to raise child benefit, and how much notice needs to be given to the staff?

Mr. Jenkin: The question of the time of year for raising child benefit is a matter for my right hon. and learned Friend the Chancellor of the Exchequer, in conjunction with myself, and we have the matter under regular review.

Mr. Orme: Does the Secretary of State realise that the story that he is giving from the Government Dispatch Box is very different from the one that he gave from this Box on the question of child benefit? Is he aware that millions of working families will be deprived of the 50p per child which the Labour Government had pledged before the last election? What will he do to overcome that? Is he aware that many of these families receive no benefit from tax cuts and that they will suffer from his Government's economic policies?

Mr. Jenkin: The remarkable thing about the Labour Party's 50p is that no money at all was earmarked for it.

Health Centres

Mr. Michael Morris: asked the Secretary of State for Social Service if he proposes to review the policy on the provision of health centres.

Dr. Vaughan: Health centres will continue to be built only where there is a clear wish locally. We are also exploring alternative ways of providing good general practice facilities.

Mr. Morris: Is my hon. Friend aware that many general practitioners would like to buy an equity stake in a health centre, either through a long leasehold or through a freehold, and will he urgently consider sending revised instructions to the health authorities to make this possible?

Dr. Vaughan: I am aware of that, and I have already met representatives of the General Practice Finance Corporation. My right hon. Friend is considering proposals which it has made for increasing the amount which it can lend from £25 million to £100 million and for a scheme which would permit purchase and lease back of newly built practice premises. If accepted, these changes will require legislation.

Mr. Dobson: The Minister said that he would continue to permit health centres to be built where there was a local demand. Does that mean where there is a demand from local people or only where there is a demand from the local general practitioners? If the latter, they will be able to continue to obstruct the development of health centres.

Dr. Vaughan: The hon. Gentleman does not seem to realise that it is not possible to run a health centre without the collaboration and joining in of the local general practitioners.

Supplementary Benefit Payment (Chrysler Employees)

Mr. Bruce-Gardyne: asked the Secretary of State for Social Services what has been the aggregate cost to public funds to date of supplementary benefit payments made to those involved in the industrial dispute at Chrysler and to their dependants, respectively.

Mrs. Chalker: Nothing up to last Tuesday, the latest date to which information is available.

Mr. Bruce-Gardyne: I am relieved to hear that, but does my hon. Friend agree that it would be most undesirable for the taxpayer to be invited to subsidise an industrial dispute of this kind, where it has been made clear by Peugeot that it is not prepared to maintain employees regardless of performance, as Chrysler, perhaps, and Lord Lever were prepared to do in the past?

Mrs. Chalker: The dispute has coincided with the holiday shutdown, and to date the requirements of those involved have been covered by final earnings and holiday pay. I understand also that the unions involved have not declared the dispute official, so they have made no strike payments. We shall watch what happens in this matter, but the question that we have to face is the need of the family. The situation has not changed from what pertained hitherto. The striker is not entitled to supplementary benefit.

Mr. Flannery: Can the hon. Lady give the aggregate cost to public funds of the 100,000 workers who have just gone on the dole, and the aggregate cost to public funds of the 500,000 workers who will go on the dole as a result of the cuts which the Government now intend to impose on the British people?

Mrs. Chalker: The answers that the hon. Gentleman seeks do not arise on this question, and without notice I cannot give him the detailed figures. If he cares to put down a detailed question he will be given the information.

Mr. Dykes: Would it not be morally indefensible to take any action about the payment of supplementary benefit to strikers' families that would cause those families and the children to suffer in any way? Will my hon. Friend confirm that the Government have no intention of ever doing such a thing?

Mrs. Chalker: I understand what my hon. Friend says. We shall not be taking any hasty decisions about what should happen, but clearly one of the possibilities is the deeming of strike pay, which we shall be examining in due time.

Mr. John Evans: For the benefit of some of her hon. Friends, will the hon. Lady confirm that, in the period 1974 to 1978, 81 per cent. of strikes, official and unofficial, were settled within 12 working


days and therefore no supplementary benefits were involved?

Mrs. Chalker: I am well aware that in many cases supplementary benefit is not paid because strikes are, one is thankful to note, settled very quickly. If the figure is 81 per cent. I am glad to hear it. I wish that it were even higher, because then we might have the opportunity of gaining the benefits from continuous productivity in our factories—a problem that has so bedevilled our situation hitherto.

Blind Persons

Mr. Ancram: asked the Secretary of State for Social Services if he will make a statement on Government policy relating to the payment of a blindness allowance.

Mr. Prentice: We have the greatest sympathy for blind people and the problems they face, but the resources are not at present available to finance new benefits.

Mr. Ancram: Does my right hon. Friend realise that since 1948 blind people in this country have consistently fallen behind and that in comparison with Europe we are not even in the same league? Can he assure the House that, unlike the Labour Government, he regards the provision of help to blind people as a priority?

Mr. Prentice: I think that the case for an income in the form of a blind allowance is unanswerable on its merits, but if it were administered at the present time at the rate of £10 a week it would cost about £80 million or £90 million a year. No Government, including the recent Labour Government, have been able to find those resources, and clearly in present circumstances we are not able to find them, either.

Mr. Alfred Morris: Is the right hon. Gentleman, as Minister with responsibility for the disabled, in any way concerned that there was not a word about the disabled in the Queen's Speech? Does that mean that we shall have to wait at least until 1981 for even a Green Paper about a new general disablement benefit which will embrace blind people? Is it not utterly outrageous that disabled people should be made to wait after a Budget

that gave £1,400 million to the richest 5 per cent. of taxpayers in this country?

Mr. Prentice: If it is outrageous that I cannot anounce a general disability income after 11 weeks in office, I wonder what is the appropriate adjective for the right hon. Gentleman, who held this job for five years.

Autistic Children

Mr. Hal Miller: asked the Secretary of State for Social Services what representations he has received from parents of autistic children.

Sir George Young: One, Sir, and a paper from the National Society for Autistic Children. I hope to meet the society in the near future to discuss its paper about services for autistic people.

Mr. Miller: Is my hon. Friend aware of the distress caused to many parents of autistic children in that they are unable to leave any money in their wills or by other means to buy them a few creature comforts while they are in residential care after the death of their parents? Will he look into the possibility of exempting up to a certain small sum these would-be bequests from being paid into the kitty of the residential home?

Sir G. Young: I understand the problems that my hon. Friend describes, and I shall be happy to raise the matter with my right hon. and learned Friend the Chancellor of the Exchequer.

Mr. Edwin Wainwright: Will the Minister take into account that there are many disadvantaged persons in this country whose parents are going through quite a deal of trouble, trial and tribulation in an effort to provide for their children's future, but will he take into account also the position of grandparents who take over the responsibility of looking after their grandchildren when the mother has passed away and the father is not there to take on the responsibility? They receive no allowance if they do not have to be on social security benefit or supplementary benefit.

Sir G. Young: I do not think that that arises directly out of the original question—

Mr. Wainwright: It is a good question.

Sir G. Young: —but I shall be happy to look into the issues that the hon. Gentleman raises.

Giro Cheques

Mrs. Knight: asked the Secretary of State for Social Services how many Giro cheques issued by his departmental managers in local offices were lost or stolen in 1978; and what was the amount of public money paid twice over as a result of these losses.

Mr. Patrick Jenkin: A total of 57 million Giro cheques were issued by my Department in 1978, of which 91,000 were reported missing. About one-third of these were replaced immediately on hardship grounds, but over half of these resulted in duplicate payments causing an estimated loss of £480,000. I am reviewing policy in this area.

Mrs. Knight: Will my right hon. Friend take care not to fall into the trap of regarding this matter as one of small importance because it concerns a relatively small part of the total that is paid out? May I commend to him the theory that if he looks after the thousands the millions will take care of themselves? Will he take steps to take greater care of security at the payout point so that the money goes to the person whose name is on the Giro cheque?

Mr. Jenkin: I am grateful to my hon. Friend for that suggestion. The review that has been carried out by my Department embodies a series of additional checks at the point of payout to reduce and, I hope, to minimise the amount of fraud that is carried out through the issue of Giro cheques. The issue is always one of balance. Undoubtedly there are cases of immediate hardship where immediate relief is required, and these have to be balanced against measures to check possible fraud.

Mr. Cryer: Will the right hon. Gentleman resist attempts by his hon. Friends to attack those who claim supplementary benefit and to regard them as scroungers? Does he accept that we are all concerned that there should be no fraudulent use of supplementary benefit? Will he also accept that far greater sums go astray? For example, tax evasion amounts to several hundred million pounds a year, while the loss from supplementary

benefit payments is only about £3 million. Will he tell his Cabinet colleagues that, far from attacking the majority of decent ordinary people who are on supplementary benefit, they should pursue tax losses, which represent by far the greater amount?

Mr. Jenkin: I have many varied responsibilities, but the pursuit of tax evasion is not one of them. I am happy to inform the hon. Gentleman that none of my right hon. or hon. Friends has ever described any legitimate claimant to supplementary benefit as a scrounger.

Geriatric Services (Wandsworth)

Mr. Thomas Cox: asked the Secretary of State for Social Services if he is satisfied with the provision of geriatric services in the London borough of Wandsworth.

Sir George Young: The Merton, Sutton and Wandsworth area health authority and the London borough of Wandsworth are primarily responsible for the care of the elderly in Wandsworth. I have no reason to suppose that these authorities do not provide adequate services.

Mr. Cox: May I assure the Minister that many local practitioners and organisations that look after the elderly in Wandsworth are deeply concerned about the provision of services? Is the hon. Gentleman aware that in Wandsworth we, unfortunately, have the most reactionary Tory council in Britain, which is now deliberately cutting all social services, across the board, within the borough? As a matter of urgency, will he seek a meeting with the Wandsworth council social services department and local hospitals to make himself fully aware of the lack of provision for elderly geriatrics within the borough?

Sir G. Young: No, Sir. I think that last year one of the biggest swings throughout the country took place in Wandsworth, in response to the previous regime.

Mr. Adley: Where it is proposed to close old people's homes, be it in Wandsworth or at Everton Grange, in my constituency, will my hon. Friend do his best to ensure that the doctors concerned, especially those who are attending the old folk, are at least given the opportunity


to be consulted, rather than being treated as arrogantly as they have been in my constituency, where they have not had a chance to express their opinions.

Sir G. Young: This is primarily a matter for the local authority, but I shall draw to its attention what my hon. Friend said.

Mr. Christopher Price: Is the hon. Gentleman aware that it is being suggested that it will be necessary to discontinue pocket money payments to the elderly in old people's homes in local authorities throughout the country because of the Government's cuts? Does he support that suggestion, which comes from the Tory Association of County Councils?

Sir G. Young: Regulations have been laid prescribing an increased personal allowance for residents of old people's homes from the date of the November uprating of the retirement pension.

LADYWOOD

Mr. Sever: asked the Prime Minister when she expects next to visit Lady-wood.

The Prime Minister (Mrs. Margaret Thatcher): I have no plans to do so, but I visited Birmingham last Friday.

Mr. Sever: Does the right hon. Lady agree that when she visited Birmingham on Friday it would have been in the better interests of the city if she had had consultations with public representatives, community leaders and others who are desperately concerned about the future of Birmingham's inner city partnership scheme, rather than swanning around presenting awards to press men and photographers?

The Prime Minister: I happen to think that the press is a rather important part of a free society. I was pleased that the Lord Mayor of Birmingham was there, too.

PRIME MINISTER (ENGAGEMENTS)

Mr. Dubs: asked the Prime Minister if she will list her official engagements for 24 July.

The Prime Minister: In addition to duties in this House I shall have meetings with ministerial colleagues and others, including one with General Rogers, the new Supreme Allied Commander Europe.

Mr. Dubs: Will the right hon. Lady find time today to consider answering a question that she has failed to answer three times in the House in recent weeks, namely, what comfort is there for the many thousands on housing waiting lists in the light of her Government's policy to encourage sales of council housing when those on the waiting lists cannot afford to buy the houses that might be on offer?

The Prime Minister: I think that the hon. Gentleman is trying to find a connection between two things that are not connected. There are many, many people in council houses who will be tenants for life, who will never move, and who want to own the homes they will live in for the rest of their lives. They will be given an opportunity, which they would never have had under Labour, to purchase their homes.

Mr. Alan Clark: Will my right hon. Friend find time today, or at the earliest opportunity, to deny categorically the reports that are becoming increasingly current that defence is also to have its expenditure cut?

The Prime Minister: If I am to deny or confirm each and every question that is put to me on public expenditure, I shall be in considerable difficulty. We shall, of course, honour our NATO commitments.

Mr. James Callaghan: On the question of the opportunity that is to be given to council house tenants to buy their houses, will the right hon. Lady deny the proposal made by one of her advisers that mortgage interest relief is to be disallowed for tax purposes?

The Prime Minister: I am delighted to deny it. One's advisers are not always right, and I often tell them so.

Mr. Dykes: Will my right hon. Friend have the opportunity this afternoon to check whether she has yet received a response from the Transport and General Workers Union to the enormous concern that was expressed in the House a week or more ago that several speakers at its


most recent conference who wanted to support the Government's proposals for trade union reform were denied the opportunity of going to the rostrum to speak? If my right hon. Friend has a chance to check to ascertain whether a response has been made, will she take up the matter further with the union? Is she confident that we shall get a fair hearing from trade union leaders, when that sort of thing goes on?

The Prime Minister: I shall look into that later today. I am certain that we have the support of many members of the Transport and General Workers Union, and of other unions, in what we are trying to do to reform trade union law.

Mr. Freud: Will the right hon. Lady consider with care the letter delivered to 10 Downing Street by representatives of 3,500 marchers of Equity, pointing out that the VAT rate of 15 per cent. and the annual contribution of 45p per head compare pretty miserably with £7·80 per head and zero rated VAT in other European countries for the living arts?

The Prime Minister: I think the hon. Gentleman will accept that the substantial reductions in direct taxation will enable many private people to contribute to the arts who have not been able to do so before, and that that will be of great benefit to many in Equity.

Mr. Bidwell: Will the right hon. Lady concede that she might have been badly advised about the contemplated changes in the immigration rules, and that if she goes ahead with them after the recess she may be brought before the European Court of Human Rights on the matter of women and families?

The Prime Minister: Those changes in the immigration rules were set out in detail in the manifesto. We intend to bring them in after we return from the recess.

Mr. Garel-Jones: asked the Prime Minister if she will list her official engagements for Tuesday 24 July.

The Prime Minister: I refer my hon. Friend to the reply that I gave a moment ago.

Mr. Garel-Jones: In the course of her busy day, will my right hon. Friend find time to ask her hon. Friend the Minister of State for Housing and Construction to

speed up the preparation of the housing Bill? More important, can she give an assurance that the right of council tenants to purchase will be enshrined in that Bill in such a way as to make it impossible for Labour-controlled authorities to deny tenants that right?

The Prime Minister: That is most certainly our objective. We shall need to do that. Otherwise, many Labour authorities would deny tenants that right. We are determined that they shall have it.

Mr. Alton: Will the right hon. Lady apply the same strictures to the Conservative-controlled authorities that may not wish to sell council houses, especially in the rural areas? Will she reconsider the Government's proposals to make the sale of council houses compulsory? Will she extend to the sale of council dwellings the same logic that she extended in the Education Bill to allowing local authorities the choice of making up their minds about whether they should continue with selective education?

The Prime Minister: If one applied the reasoning behind the hon. Gentleman's question, there would be fundamental laws governing every citizen in the United Kingdom. If one applied his reasoning to education, we should not have a law about the school starting or leaving ages. Some things are so fundamental that they must apply to all citizens regardless of the local authority area in which they live. Others are matters for the local authorities. We believe that the right to buy council houses should belong to everyone, with one or two possible exceptions, such as some houses in national parks and tied houses. In general, the right should apply to everyone. That is the line that we shall follow in the legislation.

Mr. William Hamilton: Will the Prime Minister reconsider the answer that she gave to the Leader of the Opposition about mortgage interest repayments? How does she square that answer on the favourable treatment given to those people and the slashing of housing subsidies to council houses, which will inevitably put up the rents by about £2 a week?

The Prime Minister: As far as I remember, council house rents meet only about 43 per cent.—it might be a little more; it is well below 50 per cent.—of the cost of council houses.
As to mortgage relief, every time tax is reduced the mortgage costs more. The amount upon which the relief is given£25,000—has not been put up for five years.

Mr. Chapman: As to Government spending cuts—announced, proposed, or the figment of many people's imaginations —will my right hon. Friend confirm that this year's total public expenditure will be no less than £11 billion more than it was last year? Should not these so-called cuts be seen for what they are—an attempt to cut back profligate Government spending?

The Prime Minister: The level of planned expenditure of the previous Government would very rapidly have led us back to where we were in 1976 when the IMF had to be called in and when even the previous Government had to impose public expenditure cuts. It is important that we reduce public expenditure as a proportion of the total national income. Our task at the moment is to constrain it.

Mr. James Callaghan: Is the right hon. Lady aware that what she said in the first part of her answer was totally untrue? As to the second part, does she not recognise that if there is no growth in the economy the burden of public expenditure will become greater? When will she apply her mind to the present absurdly high interest rates, which require industry to curb its investment and are dragging in foreign money, which itself increases the value of sterling and depresses exports? When will she get round to these fundamental problems of growth?

The Prime Minister: In the autumn of 1976 the right hon. Gentleman said, on the question of cutting public expenditure, that it ought to be reduced over a period as a proportion of GDP. That is exactly what we are trying to do. It was reduced. The IMF comes in later. The IMF letter of intent said that
an essential element of the Government's strategy will be a continuing and substantial reduction over the next few years in the share of resources required for the public sector. It is also essential to reduce the public sector borrowing requirement",
and so on. It lies ill in the right hon. Gentleman's mouth to criticise us for doing now what he had to do when the IMF was called in.

Mr. Callaghan: Will the Prime Minister now answer my question? When will she deal with these absurdly high interest rates?

The Prime Minister: I apologise to the right hon. Gentleman. I forgot the third part of his question.
The right hon. Gentleman knows that interest rates will have to remain high while there is such a tremendous amount for borrowing from both the clearing and other banks. If by any chance it were let go it would have a bad effect on inflation next year. The previous Chancellor was much more of a monetarist than he now cares to admit. I am determined that we shall keep down inflation. Until demand is reduced we cannot reduce interest rates. We shall do so at the first opportunity.

Mr. Callaghan: In view of the consequences of the foreign money now attracted to London by these high interest rates, and the consequential effect on the strength of sterling, how many bankruptcies does the right hon. Lady expect that there will be and how much unemployment must we see before she sees sense on this absurdly high level of interest rates?

The Prime Minister: The level of interest rates is below the record achieved by the right hon. Gentleman in office.

Mr. Callaghan: I realise that the right hon. Lady is having a difficult time about this matter, but will she undertake to ensure that the present level of interest rates will last no longer than the level of interest rates to which she referred under the Labour Government?

The Prime Minister: The right hon. Gentleman knows that we can never, never, never give any undertaking on interest rates. If he were at this Dispatch Box he would say exactly the same.

Mr. Callaghan: Why make the comparison?

SCOTLAND (CONSTITUTIONAL PROPOSALS)

Mr. Dalyell: asked the Prime Minister if she will make a statement on the progress of the all-party talks on new constitutional proposals for Scotland.

The Prime Minister: My right hon. Friend the Chancellor of the Duchy of Lancaster has had preliminary discussions about all-party talks with those parties represented in Scotland and hopes to put proposals about terms of reference to those concerned in the autumn.

Mr. Dalyell: Which member of the Cabinet will be in charge of the talks on the Government side?

The Prime Minister: The Leader of the House will be in charge, as he has been in charge of the all-party consultations.

Mr. McQuarrie: When the talks reach an appropriate stage, will my right hon. Friend bear in mind that there is a considerable desire among the people of Scotland to listen to these talks in public? Will she take steps to ensure that they are so held? May we also make use of the buildings and grounds on which the crowd on the other side spent so many millions of pounds?

The Prime Minister: I think that there might be an occasion for due reticence on this matter when the talks begin. But we hope to establish a Select Committee on Scottish affairs when we return from the recess.

Mr. Robert Hughes: Will the right hon. Lady accept that any talks she may have in Scotland will be most unwelcome, given that she has now reneged entirely on the dispersal of Civil Service jobs? How can we trust the Government in any way at all?

The Prime Minister: I hope that there will be a statement later in the week on on the dispersal of jobs. [Interruption.] What is on the tapes is not always accurate.

Mr. Winnick: On a point of order, Mr. Speaker. I apologise for the fact that I did not give you warning of my intended point of order, but I was not to know what was to occur during exchanges at Question Time. As you may know, the press is full of reports that the Government have agreed to spending cuts in the region of £4,000 million. It was reported in The Daily Telegraph today that
The Cabinet did not feel that the situation justified making a statement to MPs before the Commons rises on Friday for the Summer Recess.

These cuts—if it is true that they are to be made—will affect adversely many of our constituents, and will undoubtedly cause a great deal of hardship. We are going into recess until late October. A number of people will obviously be given details of what is proposed, but not this House. I believe—hence my point of order—that the House is being treated with contempt by the Government in sending us away until late October without giving us details of what is being proposed.

Mr. Speaker: That is not a matter for me but it is something that could be raised in the debate when we discuss the length of the Adjournment.

Mr. Winnick: Further to the point of order, Mr. Speaker. If I may—

Mr. Speaker: Order. It was not a point of order. If the hon. Gentleman has something entirely different to say, I shall listen to him, but that was not a point of order.

Mr. Winnick: On a point of order, Mr. Speaker. I should like to make my point as briefly as I can, because I believe it to be of great importance. It is that on a matter which concerns our constituents, we are not to be given the information before we break up for the Summer Recess.

Mr. Speaker: That is not a point of order for me, as the House understands.

QUESTIONS TO MINISTERS

Mr. Campbell-Savours: I should like to draw your attention, Mr. Speaker, to a question that was asked by the hon. Member for Lancaster (Mrs. Kellett-Bowman) yesterday, during questions to the Secretary of State for Industry referring to certain aspects of the British Steel Corporation's activities in my constituency. The hon. Member for Lancaster was asking that question in her capacity as a Member of the European Assembly. [HON. MEMBERS: "Oh."] I have no objection to the hon. Member for Lancaster wishing to know the answer, but I wonder, Mr. Speaker, whether you would tell the House whether it is in order for Members of the European Parliament to use their position in this Chamber by


asking questions which may not be helpful to hon. Members representing the domestic constituencies.
I had given to the British Steel Corporation employees an assurance that I would not turn this issue into a political football. I feel that what happened yesterday did that very thing. It is for that reason, Mr. Speaker, that I seek your guidance.

Mrs. Kellett-Bowman: Further to the point of order, Mr. Speaker—of which the hon. Member for Workington (Mr. Campbell-Savours) did not have the courtesy to give me notice. I would point out that if an hon. Member for a particular constituency is not present, as the hon. Member was not when the question of the Shotton steel closures arose—a question that intimately concerns his constituency and mine—it is up to somebody else to stick up for the people of Workington. That is what I was seeking to do.

Mr. Campbell-Savours: rose—

Mr. Speaker: Order. I will give the hon. Member for Workington (Mr. Campbell-Savours) an opportunuity in a moment. I first want to give a ruling on a very important question. The wider constituencies belonging to the Assembly in Europe have no bearing at all upon us here. I treat every hon. Member here

as a Member for the constituency for which he or she was elected to this House.

Mrs. Kellett-Bowman: Further to the point of order, Mr. Speaker. Is it not a breach of the conventions of this House for the hon. Member for Workington to table 17 written questions, which will cost the taxpayer £560 to answer, relating exclusively—[Interruption]—to my constituency, with which he has no concern whatever? [Interruption.] Does this not—

Mr. Speaker: Order. The House must allow the hon. Lady to make her point.

Mrs. Kellett-Bowman: The hon. Member for Workington last Tuesday night on the radio was asking for vastly increased sums for research facilities. If he is to use these sums for research into other hon. Members' constituencies, will not this be an abuse of the taxpayers' money?

Mr. Speaker: Order. I listened to the hon. Member for Workington, who, I hope, will not pursue this private duel.

Mr. Campbell-Savours: I want only to thank you, Mr. Speaker, for the courtesy that you have extended to me by explaining this highly important constitutional question. I was embarrassed by what happened, and I might add—for the benefit of the hon. Lady—that I was present at both of the debates to which she previously referred.

Post Office (Amendment)

3.37 p.m.

Mr. Neville Trotter: I beg to move,
That leave be given to bring in a Bill to end the exclusive privilege of the Post Office with respect to the conveyance etc. of letters.
You may well recall, Mr. Speaker, that my hon. Friend the Member for Eastbourne (Mr. Gow) endeavoured to introduce a similar Bill three and a half years ago. It was on 4 February 1976, the very first day on which you presided over our affairs.
Support on that occasion was given not only by half the present Government Front Bench but by the right hon. Gentleman the Leader of the Liberal Party and, I believe, all Members of the Liberal Party who voted on that occasion, and also by the right hon. Gentleman the Leader of the Scottish National Party. Coming, as he does, from the Western Isles, I should have thought that that would deal with any suggestion that there is satisfaction with the postal system at present in the remotest parts of Britain.
If we consider what has happened since the House last debated this matter three years ago, we see that the performance of the Post Office has continued to decline. The system has deteriorated, so that the same number of postmen as before now deliver billions fewer letters, and those take longer than ever to arrive.
The Carter report on the Post Office in 1977 pointed out that productivity had declined, despite the Post Office reducing its targets of service and despite mechanisation. At the same time, the Carter report referred to substantial increases in administrative costs. The service has got worse, and is now worse than it was 40 or 50 years ago, despite modern technology.
Apologists for the Post Office refer to the increasing spread of towns and the resulting additional distance, but that factor applied also between the wars, when productivity in the Post Office increased instead of declining.
On four occasions this year the Post Office has begged customers not to use its services. On one occasion five ladies at the same time refused to issue the bulk stock of stamps. That would certainly

seem to be one way of preventing the Post Office being bothered by letters.
It is surely ironic that one Post Office department actually issued printed letters asking its customers to be co-operative by keeping correspondence to it down to a minimum. Someone, somewhere, may indeed have been hoping for a letter, but it certainly was not the Post Office.
I base my arguments not so much on the recent highlighting of the postal services as on the unprecedented criticisms made of it by its watchdog, the Post Office Users National Council. Research has shown that every day over 1 million first-class letters arrive late and 1 million second-class letters cannot even reach their destination by the third day. One first-class letter in 10 is now late. With overseas mail there can be delays of weeks.
The combined result of the withdrawal of Sunday collections, and the extension of second-class mail from second- to third-day delivery, means that a second-class letter posted on Saturday afternoon or Sunday is not expected to reach its destination before the following Thursday, if all goes well—as it often does not. Naturally, the rural areas particularly suffer because of this deterioration in service. It is no wonder that the Post Office ignores the weekend when computing its official figures.
The Post Office wishes to reintroduce a second-day delivery for second-class mail and Sunday collections, worked by voluntary labour, but both have been prevented because of the attitude of the unions. In a recent report, the Post Office Users National Council chairman referred to
the appalling and unacceptable quality of the postal service … and the apparent lack of initiative and effect by the management to secure staff agreement to changes that would benefit the customer and be in the long-term interest of the business.
The report is quite damning in its criticisms. It refers to the continuing decline in productivity and goes on:
customers are entitled to expect value for money and what they want most of all is a reliable service. It cannot be said that they are getting either … even against the Post Office's reduced standards, there has been a serious deterioration … in the reliability and delivery performance has fallen lamentably short of targets.


The managing director has said that service has declined to an unacceptable level:
It is the disastrous failure of working relationships between management and staff which has led to the unacceptable deterioration in the postal service. The customer is expected to pay more for less and to pick up the tab for the consequences of problems which it is the job of management and unions to resolve.
Those are very strident criticisms indeed from any watchdog body.
I remind the House that this is the industry into which the last Government saw fit to introduce an attempt at industrial democracy with worker directors. So much for the success of that experiment. The individual postman rightly remains as popular and well respected as ever. The public appreciate that the fault lies not with the postman but with the monolithic system. The Post Office and the unions between them have failed the postman as much as they have failed the customer. The Post Office chairman has admitted that he has been unable to convince union membership to accept change in return for the opportunity to get more pay. My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) pointed out on 2 July that it would be possible to serve the public better, at lower cost and with better conditions for the postmen if there were cooperation to improve productivity. I believe that quite simple steps could lead to dramatic improvements.
The Post Office Users National Council is against breaking the Post Office monopoly but it must admit that its strident criticisms have proved quite ineffective in securing improvement. Of course, a monopoly has made sense in the past, but now we must doubt whether it remains in the public interest for the Post Office to have a monopoly. It was put in this way at page 71 of the Carter report:
If the service became much worse than the public expects it would become impossible to defend the monopoly against those who might offer a better service.
That is the crux of the matter, and I believe that we have now reached that situation.
My right hon. Friend the Member for Leeds, North-East said, with regard to the Post Office, that it is unacceptable

for a nationalised industry to use its monopoly to cloak inefficiency. That is a view with which I entirely agree, and so, I believe, do the public—the customer. No discipline could be more satisfactory than that of competition. If the House supports the Bill this afternoon, I believe that such an expression of opinion could, of itself, provide the stimulus to improve working relationships within the Post Office. It could, indeed, in a short time lead to a dramatic improvement in service.
I therefore ask that leave be given for me to bring in this Bill in the best interests of the Post Office, its staff and, above all, its customers—the public.

Mr. Speaker: The right hon. Member for Manchester, Openshaw (Mr. Morris) gave me notice that he wished to oppose this application.

3.45 p.m.

Mr. Charles R. Morris: In opposing the Bill, it is my duty to declare an interest as a former member of the national executive of the Union of Post Office Workers. I listened very carefully to the speech made by the hon. Member for Tynemouth (Mr. Trotter). At the outset, I would say that I do not seek to defend the deterioration that has taken place in Post Office services in recent months. That is a matter of concern for my union, the Post Office management and myself.
The role of this House is not merely to identify a problem but at times to understand the problem. We cannot have an efficient Post Office service when there are vacancies which at present are touching 10,000. The Post Office is short of 7,000 postmen and 3,000 postmen higher grade. In contemporary Britain there is not a queue of people who want to get up at 4 o'clock in the morning to be at the Post Office sorting offices to sort out the mail and deliver it in all weathers. Given any sort of choice, people do not opt for that task.
As so many other people have done, the hon. Member for Tynemouth referred to the Mount Pleasant sorting office. It has been said that it is the largest postal sorting office in the world, which, indeed, it is. At present the staff establishment at that office is 3,500. Currently there are 900 vacancies. Because of the antisocial hours of attendance, great difficulty


is caused in recruiting staff to fill vacancies in the Post Office. This Bill, by breaching the monopoly, will not solve that problem.
I have rarely listened to such a superficial speech as that which we have just heard. Quite frankly, breaching the monopoly will do a number of things. It will allow the postal pirates to cream off the profitable areas of postal deliveries and leave the rural areas, the geographically isolated and unprofitable areas, to the Post Office. Those areas have already lost rail transport, are now losing buses, and would find that their postal services were at risk if this Bill were to go through.
Another consequence would be that postal rates would rocket and we would see a further deterioration in postal services. That is not fear or speculation. We need go back only to 1971 to see what happened when the Post Office monopoly was breached. I have here a copy of the London Evening News for 17 February 1971. Hon. Members will be able to see the headline from where they are sitting. It reads:
London Storm as Pirate Post goes Haywire".
Under the heading it reads:
Ex-public schoolboy Tim Randall admitted today that his pirate postal service had gone 'haywire.' Hundreds of complaints have poured into his Chelsea headquarters since he began his delivery service five weeks ago. Urgent letters posted to central London at the beginning of the month have still not arrived.
If anybody wants to know what happened when we introduced alternative mail services and breached the monopoly, he needs only to refer to the Daily Tele

graph of 12 March 1971. It was indicated there that private mail, at 15p a time, was unloaded back on to the Post Office. The report said:
About 5,000 letters were dumped at Luton Post Office, Beds, yesterday by a man driving an unmarked van. Each carried the name Randall's Mail Service, Chelsea'.
When I said that the cost of the post would rocket, the charges then were from 15p to 75p. That would be the consequence of supporting this Bill.

Supporters of the Bill remind me of the Bourbons. They remember nothing and learn nothing. It amazes me that the hon. Gentleman had the temerity to quote from the reports of the Carter committee and the Post Office Users National Council. He did not point out that both had gone on record as opposing the break-up of the Post Office monopoly. He did not say that in 1967 the Select Committee on Nationalised Industries was equally firmly opposed to the break-up of the monopoly. Not only is POUNC opposed to the breaking of the monopoly, but so is the Post Office Board and the Council of Post Office Unions. The hon. Gentleman and those who support the Bill can delude themselves, but frankly they are not entitled to delude this great public service and the country. I totally oppose the Bill, and invite the House to oppose it.

Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and Nomination of Select Committees at Commencement of Public Business):—

The House divided:— Ayes 187, Noes 210.

Division No. 77]
AYES
[13.51 p.m.


Adley, Robert
Bruce-Gardyne, John
Dodsworth, Geoffrey


Alexander, Richard
Bryan, Sir Paul
Dorrell, Stephen


Ancram, Michael
Budgen, Nick
Douglas-Hamilton, Lord James


Aspinwall, Jack
Butcher, John
Dover, Denshore


Atkins, Robert (Preston North)
Cadbury, Jocelyn
Dunn, Robert (Dartford)


Atkinson, David (B'mouth East)
Carlisle, John (Luton West)
Durant, Tony


Baker, Nicholas (North Dorset)
Carlisle, Kenneth (Lincoln)
Edwards, Rt Hon N. (Pembroke)


Banks, Robert
Chalker, Mrs. Lynda
Eggar, Timothy


Beaumont-Dark, Anthony
Chapman, Sydney
Elliott, Sir William


Benyon, Thomas (Abingdon)
Clark, Hon Alan (Plymouth, Sutton)
Emery, Peter


Berry, Hon Anthony
Clark, William (Croydon South)
Fairbairn, Nicholas


Best, Keith
Clarke, Kenneth (Rushcliffe)
Fairgrieve, Russell


Bevan, David Gilroy
Cockeram, Eric
Faith, Mrs. Sheila


Biggs-Davison, John
Colvin, Michael
Farr, John


Blackburn, John
Cope, John
Fell, Anthony


Bonsor, Sir Nicholas
Cormack, Patrick
Fletcher, Alexander (Edinburgh N)


Boscawen, Hon Robert
Corrie, John
Fookes, Miss Janet


Bottomley, Peter (Woolwich West)
Costain, A. P.
Forman, Nigel


Braine, Sir Bernard
Cranborne, Viscount
Fraser, Peter (South Angus)


Bright, Graham
Crouch, David
Fry, Peter


Brown, Michael (Brigg &amp; Sc'thorpe)
Dean, Paul (North Somerset)
Gardner, Edward (South Fylde)




Garel-Jones, Tristan
Mackay, John (Argyll)
Shepherd, Richard (Aldridge-Br'hills)


Glyn, Dr Alan
McNair-Wilson, Michael (Newbury)
Silvester, Fred


Goodhew, Victor
McQuarrie, Albert
Sims, Roger


Goodlad, Alastair
Major, John
Smith, Dudley (War. and Leam'ton)


Gow, Ian
Marland, Paul
Speller, Tony


Gower, Sir Raymond
Marlow, Antony
Spicer, Jim (West Dorset)


Grant, Anthony (Harrow C)
Marten, Neil (Banbury)
Spicer, Michael (S Worcestershire)


Greenway, Harry
Mather, Carol
Sproat, Iain


Grimond, Rt Hon J.
Maude, Rt Hon Angus
Squire, Robin


Grist, Ian
Mawby, Ray
Stainton, Keith


Grylls, Michael
Mawhinney, Dr Brian
Stanbrook, Ivor


Gummer, John Selwyn
Maxwell-Hyslop, Robin
Stevens, Martin


Hamilton, Michael (Salisbury)
Miller, Hal (Bromsgrove &amp; Redditch)
Stewart, John (East Renfrewshire)


Hampson, Dr. Keith
Mills, Peter (West Devon)
Stokes, John


Hayhoe, Barney
Molyneaux, James
Stradling Thomas J.


Heddle, John
Morris, Michael (Northampton, Sth)
Thompson, Donald


Hicks, Robert
Morrison, Hon Peter (City of Chester)
Thorne, Neil (Ilford South)


Higgins, Terence L.
Myles, David
Thornton, George


Hill, James
Neale, Gerrard
Townend, John (Bridlington)


Hogg, Hon Douglas (Grantham)
Needham, Richard
Trippier, David


Holland, Philip (Carlton)
Nelson, Anthony
Trotter, Neville


Howell, Ralph (North Norfolk)
Newton, Tony
Vaughan, Dr Gerard


Hunt, David (Wirral)
Normanton, Tom
Viggers, Peter


Jessel, Toby
Osborn, John
Waddington, David


Jopling, Rt Hon. Michael
Page, John (Harrow, West)
Wainwright, Richard (Colne Valley)


Kellett-Bowman, Mrs Elaine
Page, Rt Hon R. Graham (Crosby)
Waldegrave, Hon William


Kilfedder, James A.
Parris, Matthew
Walker, Bill (Perth &amp; E Perthshire)


Kimball, Marcus
Patten, Christopher (Bath)
Wall, Patrick


King, Rt Hon Tom
Patten, John (Oxford)
Waller, Gary


Kitson, Sir Timothy
Pawsey, James
Ward, John


Knight, Mrs Jill
Pollock, Alexander
Watson, John


Lang, Ian
Porter, George
Wells, John (Maidstone)


Langford-Holt, Sir John
Powell, Rt Hon J. Enoch (S Down)
Wells, P. Bowen (Hert'fd&amp;Stev'nage)


Lawrence, Ivan
Prentice, Rt Hon Reg
Wheeler, John


Lee, John
Price, David (Eastleigh)
Whitelaw, Rt Hon William


Le Marchant, Spencer
Proctor, K. Harvey
Whitney, Raymond


Lennox-Boyd, Hon Mark
Rathbone, Tim
Wilkinson, John


Lloyd, Ian (Havant &amp; Waterloo)
Rhodes James, Robert
Younger, Rt Hon George


Lloyd, Peter (Fareham)
Roberts, Michael (Cardiff NW)



McAdden, Sir Stephen
Robinson, Peter (Belfast East)
TELLERS FOR THE AYES:


McCrindle, Robert
Ross, Wm. (Londonderry)
Mr. George Gardiner and


Macfarlane, Neil
St. John-Stevas, Rt Hon Norman
Mr. Christopher Murphy.


MacGregor, John
Shaw, Michael (Scarborough)





NOES


Abse, Leo
Cryer, Bob
Garrett, W. E. (Wallsend)


Adams, Allen
Cunliffe, Lawrence
George, Bruce


Alton, David
Cunningham, George (Islington S)
Golding, John


Anderson, Donald
Cunningham, Dr John (Whitehaven)
Gourlay, Harry


Archer, Rt Hon Peter
Dalyell, Tam
Graham, Ted


Armstrong, Ernest
Davidson, Arthur
Grant, George (Morpeth)


Ashton, Joe
Davies, Rt Hon Denzil (Llanelli)
Hamilton, James (Bothwell)


Atkinson, Norman (H'gey, Tott'ham)
Davies, E. Hudson (Caerphilly)
Hamilton, W. W. (Central Fife)


Bagier, Gordon A. T.
Davies, Ifor (Gower)
Harrison, Rt Hon Walter


Barnett, Guy (Greenwich)
Davis, Clinton (Hackney Central)
Hattersley, Rt. Hon Roy


Beith, A. J.
Davis, Terry (B'rm'ham, Stechford)
Haynes, David


Benn, Rt Hon Anthony Wedgwood
Dean, Joseph (Leeds West)
Heffer, Eric S.


Bennett, Andrew (Stockport N)
Dempsey, James
Hogg, Norman (E Dunbartonshire)


Bidwell, Sydney
Dixon, Donald
Holland, Stuart (L'beth, Vauxhall)


Booth, Rt Hon Albert
Dobson, Frank
Home Robertson, John


Boothroyd, Miss Betty
Dormand, J. D.
Homewood, William


Bottomley, Rt Hon Arthur (M'brough)
Dubs, Alfred
Hooley, Frank


Bray, Dr Jeremy
Duffy, A. E. P.
Howell, Rt Hon Denis (B'ham, Sm H)


Brown, Hugh D. (Provan)
Dunn, James A. (Liverpool, Kirkdale)
Huckfield, Les


Brown, Robert C. (Newcastle W)
Eadie, Alex
Hughes, Robert (Aberdeen North)


Brown, Ron (Edinburgh, Leith)
Eastham, Ken
Janner, Hon G[...]eville


Buchan, Norman
Edwards, Robert (Wolv SE)
Jay, Rt Hon Douglas


Callaghan, Jim (Middleton &amp; P)
Ellis, Raymond (NE Derbyshire)
John, Brynmor


Campbell-Savours, Dale
Ellis, Tom (Wrexham)
Johnson, James (Hull West)


Cant, R. B.
English, Michael
Johnston, Russell (Inverness)


Carmichael, Neil
Ennals, Rt Hon David
Jones, Alec (Rhondda)


Carter-Jones, Lewis
Evans, Ioan (Aberdare)
Jones, Dan (Burnley)


Clark, Dr David (South Shields)
Evans, John (Newton)
Kerr, Russell


Cocks, Rt Hon Michael (Bristol S)
Faulds, Andrew
Kilroy-Silk, Robert


Cohen, Stanley
Field, Frank
Kinnock, Neil


Coleman, Donald
Flannery, Martin
Lambie, David


Concannon, Rt Hon J. D.
Fletcher, Ted (Darlington)
Lamborn, Harry


Conlan, Bernard
Foot, Rt Hon Michael
Lamond, James


Cook, Robin F.
Forrester, John
Leadbitter, Ted


Cowans, Harry
Foulkes, George
Leighton, Ronald


Cox, Tom (Wandsworth, Tooting)
Freeson, Rt Hon Reginald
Lestor, Miss Joan (Eton &amp; Slough)


Craigen, J. M. (Glasgow, Maryhill)
Freud, Clement
Lewis, Ron (Carlisle)


Crowther, J. S.
Garrett, John (Norwich S)
Lofthouse, Geoffrey







Mabon, Rt Hon Dr J Dickson
Park, George
Straw, Jack


McCartney, Hugh
Parry, Robert
Summerskill, Hon Dr Shirley


McDonald, Dr Oonagh
Penhaligon, David
Taylor, Mrs Ann (Bolton West)


McElhone, Frank
Powell, Raymond (Ogmore)
Thomas, Dafydd (Merioneth)


McKay, Allen (Penistone)
Prescott, John
Thomas, Dr Roger (Carmarthen)


MacKenzie, Rt Hon Gregor
Price, Christopher (Lewisham West)
Thorne, Stan (Preston South)


Maclennan, Robert
Race, Reg
Tilley, John


McMahon, Andrew
Rees, Rt Hon Merlyn (Leeds South)
Tinn, James


McNally, Thomas
Richardson, Miss Jo
Torney, Tom


McNamara, Kevin
Roberts, Ernest (Hackney North)
Urwin, Rt Hon Tom


Marks, Kenneth
Robertson, George
Varley, Rt Hon Eric G.


Marshall, David (Gl'sgow,Shettles'n)
Rodgers, Rt Hon William
Wainwright, Edwin (Dearne Valley)


Marshall, Dr Edmund (Goole)
Rooker, J. w.
Walker, Harold (Doncaster)


Marshall, Jim (Leicester South)
Ross, Ernest (Dundee West)
Weetch, Ken


Martin, Michael (Gl'gow, Springb'n)
Ross, Stephen (Isle of Wight)
Wellbeloved, James


Maynard, Miss Joan
Rowlands, Ted
Welsh, Michael


Mellish, Rt Hon Robert
Sever, John
White, Frank R. (Bury &amp; Radcliffe)


Millan, Rt Hon Bruce
Sheerman, Barry
Whitehead, Phillip


Miller, Dr M S (East Kilbride)
Sheldon, Rt Hon Robert (A'ton-u-L)
Whitlock, William


Mitchell, Austin (Grimsby)
Shore, Rt Hon Peter (Step and Pop)
Wigley, Dafydd


Mitchell, R. C. (Soton, Itchen)
Silkin, Rt Hon John (Deptford)
Willey, Rt Hon Frederick


Morris, Rt Hon Alfred (Wythenshawe)
Silkin, Rt Hon S. C. (Dulwich)
Williams, Rt Hon Alan (Swansea W>


Morris, Rt Hon Charles (Openshaw)
Silverman, Julius
Wilson, William (Coventry SE)


Morris, Rt Hon John (Aberavon)
Skinner, Dennis
Winnick, David


Morton, George
Smith, Cyril (Rochdale)
Woodall, Alec


Mulley, Rt Hon Frederick
Smith, Rt Hon J. (North Lanarkshire)
Woolmer, Kenneth


Newens, Stanley
Snape, Peter
Wrigglesworth, Ian


Oakes, Gordon
Soley, Clive
Wright, Miss Sheila


Ogden, Eric
Spriggs, Leslie
Young, David (Bolton East)


O'Halloran, Michael
Stallard, A. W.



O'Neill, Martin
Steel, Rt Hon David
TELLERS FOR THE NOES:


Orme, Rt Hon Stanley
Stoddart, David
Mr. Harry Ewing and


Owen, Rt Hon Dr David
Strang, Gavin
Mr. Roger Stott.


Palmer, Arthur

REGIONAL POLICY

Mr. Speaker: I have selected the amendment in the name of the Leader of the Opposition.

Mr. Arthur Lewis: On a point of order, Mr. Speaker. As one who does not intend even trying to catch your eye—I realise the hopelessness of that—may I ask whether we may have an assurance that if eight Privy Councillors on either side of the House are to be called, as they always are called, thus blocking out ordinary Back Benchers because of this tradition—and it is only a tradition to call Privy Councillors—which is very unfair on ordinary Back Benchers who try to catch your eye, this will not always be so?

Mr. Speaker: The hon. Gentleman has given me an opportunity to say that there there is a very long list indeed of right hon. and hon. Members who have indicated to me that they hope to catch my eye—

Mr. Lewis: They will.

Mr. Speaker: —and that six Privy Councillors on the Opposition Benches are hoping to catch my eye. I have followed the precedent of my immediate predecessor in the Chair, and I never call two Privy Councillors from the same party, one immediately after the other. I call a Back Bencher, who is not a Privy Councillor, in between them. I do not propose to change the time-hallowed custom of giving that precedence to Privy Councillors.

Mr. Lewis: I thank you, Mr. Speaker, for that comment—except for the last part, with respect. Perhaps I may suggest that it would be welcomed by hon. Members in all parts of the House—with the probable exception of a few Privy Councillors—if you were to consider that Privy Councillors should get together in their club and decide which of them should ask to be called, and should try to be a little fairer, just having one or two—which is sufficient—from either side, and not hogging the whole of a debate, as is always the custom.

Mr. Speaker: There is more than a germ of a good idea in what the hon. Gentleman has said. It would be helpful to the House if there were fewer Privy

Councillors in a given debate. But I do not wish to change the custom.
Allow me to say, before I call the Secretary of State to move the motion, that I believe that there is an obligation on those who know that they will be called to speak, because they are Privy Councillors, to be brief, so as to give a chance to others.

4.5 p.m.

The Secretary of State for Industry (Sir Keith Joseph): I beg to move,
That this House welcomes the changes which are being introduced by the Government in regional policy in order to concentrate assistance on areas most in need, to make it more cost effective, and to remove anomalies in assisted area gradings.
I believe that it is the wish of the House to debate, at the same time as the motion, item No. 2 on the Order Paper:
That the draft Regional Development Grants (Variation of Prescribed Percentages) Order 1979, which was laid before this House on 20 July, be approved.

Mr. Speaker: Does that course have the agreement of the House?

Hon. Members: Aye.

Mr. Speaker: Very well. The House will understand that I shall put the Questions on the two motions immediately after each other at the 10 o'clock Division.

Sir K. Joseph: I am grateful to the House and to you, Mr. Speaker.
I have to state that the Government replaced the original order on industrial development because of a possible technical error in it. The order on which the House will be asked to vote this evening is technically correct except that there is an error of 24 hours in the date on the back page. The date as printed will take from the grantees of regional development grants 24 hours' more money than is consistent with the statement that I made to the House. In order not to confuse today's debate, we shall be asking right hon. and hon. Members to vote on the order, and in the autumn the Government will table an order, subject to affirmative resolution, correcting by 24 hours the availability of regional development grant money so that those who are entitled to receive it will not suffer in any way.
The policy changes involved in the Government's regional policy proposals need to be summarised by me at the beginning of this debate, to remind the House.
First, the Government are retaining the three different sorts of areas of regional policy—the special development areas, the development areas and the intermediate areas. But the Government are proposing a change in the map, upgrading a few areas and downgrading many more. These proposals are embodied in an order that has been laid before the House—an order subject to negative resolution.
Secondly, the proportion of expenditure defrayed by grant has been changed, in the case of development areas, from 20 per cent. down to 15 per cent., and that is the subject of the statutory order to which I have just referred. After a transitional period, there is to be no grant available for buildings in intermediate areas. This is provided by discretion under the Industry Act 1972 and will be validated further by the Industry Bill that we propose to introduce this autumn.
The next change is that the threshold of expenditure that entitles an investor to development grant is being raised fivefold—from £100 and £1,000 respectively for plant and buildings to £500 and £5,000. This is being done under the discretion of the Secretary of State and will be embodied, again, in the Industry Bill this autumn.
The impact of industrial development certificates is being changed so that the threshold at which the control bites is raised to 50,000 sq. ft., and there is no need to apply for a certificate hereafter in intermediate areas. That is embodied in an order that has been laid under the Town and Country Planning Act.
There are three other changes that have to be announced. First, we propose that the building of factories will be more entrusted to private enterprise and less to the public sector. We are bringing in transitional arrangements so that the changes that I have announced will bite relatively slowly, in order to honour the commitment in the Conservative Party manifesto that no abrupt changes will be made.
We propose to toughen the criteria for the provision of regional selective assistance under section 7 of the 1972 Act,

and for assistance that is not attached to regions but covers the whole country under section 8. Those changes have the effect of concentrating assistance from the taxpayer on areas of highest unemployment and most need for improvement in economic structure. They will focus and concentrate the benefits of regional policy, and that may meet with the approval of the House as a whole.

Mr. Dan Jones: Is there any possibility of changes in the decisions made—for example, to upgrade an area to intermediate status, and from that progressively upwards? Are there provisions for that in the proposals being made to the House?

Sir K. Joseph: It is always open to the Government of the day to introduce changes when circumstances change. The Government have envisaged the possibility of upgrading, for instance, Shotton if in due course closure of the steelworks or part of the steelworks is decided on. It would be a different matter to correct a decision already made on existing circumstances. My colleagues at the Department of Industry and I will be willing to listen to evidence that we have misjudged circumstances in a particular area, but unless we have greatly misjudged them, I would be wrong to hold out hope of correction in the proposals announced.

Mr. Dan Jones: I knew that when I asked the question.

Mr. Dafydd Wigley: On that point, which deeply affects my constituency, will the Minister assure us that he will consider objective criteria such as unemployment not just on the current level but on anticipated future levels, where there are positive closures such as Shotton or the CEGB cold storage scheme, employing 2,000 men?

Sir K. Joseph: It is the job of Ministers under the relevant Act to consider future prospects as well as the present position. That does not mean, however, that we must anticipate the prospects; it means only that we must be aware of them.
At least half the purpose of regional policy is to transfer jobs from relatively prosperous to less relatively prosperous parts of the country. That has always been so. From its origin regional policy


has had social as well as economic functions. To a large extent it stems back to the depressed areas of the 1930s. To a limited extent there has been some apparent success in regional policy, judging by the disproportionate amount of the total investment—disproportionate in terms of the population concerned—that has taken place over recent years in the regions.
The main purpose of the policy is to encourage investment where it makes sense to the investors to go to assisted areas—areas where there is higher unemployment and a weaker economic structure. It is difficult to sort out the degree to which that purpose has been achieved. There are cases where investment was intended elsewhere and where, because of the availability of grants in the asisted area, it takes place there. To that extent there is a transfer of jobs.
There is a second group of cases where an investment project is so marginal that it becomes viable only with the help of grants available in the assisted areas. There is therefore a small class of investment projects that goes to the assisted areas, which probably would not have occurred anywhere else.
Then there is inward investment—mobile international investment that is attracted to the assisted areas by grants under section 7 or outside assisted areas by grants under section 8 of the 1972 Industry Act.
These inward investment projects are welcome to this country. They are of mutual benefit. We gain from the investment over and above that provided by our own economic resources, and it often provides higher productivity and innovative products and techniques. These projects also benefit the investor who decides to come here in his enlightened self-interest.
In addition to the investments that are induced to go to assisted areas—the marginal cases that go there because only there, thanks to the grant, will the investment be viable, and the inward investment cases—there is the marginal additional effect of the grant in improving the cash flow and profitability of companies that invest in assisted areas and thus have greater resources for expansion or investment elsewhere. I do not want to denigrate any of these, on the whole, bene-

ficial effects to the assisted areas, but I shall later explain the cost involved to the country.
Against the beneficial effects we have to offset certain other factors. Although we cannot be sure which they are, there are projects that have been inhibited from going ahead by the effect of the industrial development certificate barrier. Over the years many business men have not even applied for permission to develop because they feared the administrative tangle in which they would be involved, and, as they judged, the almost certain refusal. The country as a whole has possibly lost investment—

Mr. John Evans: Where is the evidence? The right hon. Gentleman is making an extremely important statement, which many Labour Members, and, I suspect, Conservative Members also, dispute. Will he prove us wrong by offering one shred of evidence to support the statement that he has just made?

Sir K. Joseph: It is largely anecdotal, but it is not to be dismissed. In the Midlands—and in particular in the West Midlands—there is a strong and widespread feeling that investment has been reduced. There is the much larger and certain class of investments in the assisted areas that would have gone ahead in those areas anyway without the policy of regional assistance.

Mr. Anthony Beaumont-Dark: The hon. Member for Newton (Mr. Evans) asked for one shred of evidence. I can quote Cadbury-Schweppes in March 1977.

Sir K. Joseph: I do not want the House to ignore my last point, that a substantial number of the investments in assisted areas would have gone ahead anyway because of the imperative of a company's market and existing location. From all these factors we can conclude that over the years there has been a net benefit to assisted areas from the regional policy.
Under section 7, the regional selective assistance that is provided at the discretion of Ministers to investment within the assisted areas, in addition to the automatic regional development grants, has been indiscriminate. There has been no attempt to provide that help at the expense of the taxpayer only to those cases


where without it the investment would not have gone ahead.
I think that the House will agree with the proposition that, in general, the assisted areas will thrive only if the economy as a whole thrives. It is intensely in the interests of the assisted areas that the economy as a whole should thrive. That is why the Government's policy of improving the economic climate to encourage decision-making, risk-taking and enterprise is so important to the assisted, as well as to the non-assisted, areas. I instance, as a familiar catalogue and as being directly relevant, the need to reduce Government spending so as to reduce borrowing, crowding out interest rates and direct taxation.

Mr. Jack Straw: I am interested in what the right hon. Gentleman said about public spending and I have been looking at his earlier pronouncements on the matter. Given his concern about public spending, can he explain why, in 1972, he issued a circular to social service authorities asking them to expand their social service departments over a 10-year period at a rate of 10 per cent. per annum in real terms?
Is not part of the problem that local authorities are facing from Government cuts due to the policies that the right hon. Gentleman was pursuing in 1972?

Sir K. Joseph: I am sure that the hon Gentleman will at least give credit to my heart, if not to my head, at that stage. I had not realised, as much as the history of recent years has taught me, the perverse effect of excessive Government spending. It is no good having the maximum of good intentions if, in seeking to carry out those good intentions, one overloads the economy and the taxpayer as we have done in recent years.
I put it to the House that the better the economic climate, the more likely it is that we shall get expansion in the assisted areas as well as in other areas. The tighter the labour market in non-assisted areas, the more will be the gain to the national economy by the use of labour available in assisted areas.
I know that although there is apparently high unemployment—and, indeed, high unemployment in some parts of the country—there are great labour shortages

in many parts, particularly in many of the non-assisted areas.
We are half-way between the position where labour is tight in the non-assisted areas and that where there is plenty of labour available in those areas. I repeat that when there is labour available in the assisted areas but not in the non-assisted areas there is a national gain when investment projects go to assisted areas.
The whole purpose of transfers between non-assisted and assisted areas makes sense only when the map dividing assisted from non-assisted areas is fair. Until now, the map has not been fair. There have been many non-assisted areas with a higher proportion of unemployed and a weaker economic structure than some assisted areas. That is why the Government's proposals to redraw the map, embodied in an order before the House, are an essential part of making sense of regional policy.

Mr. Cyril Smith: The right hon. Gentleman has talked about changing the map on which the grants apply. Can he give an assurance that grants already committed by Government Departments will be maintained? The right hon. Gentleman has referred to giving grants on assets created by a date in 1980. If a factory is, for example, half-
built by 1980, will grant be payable on the whole of the factory, some of which may be completed after 1980?

Sir K. Joseph: The answer to that question is an unqualified "No". Expenditure that will be grant-aided will be only that on plant and buildings that have been provided by the cut-off date. That is the only fair way to proceed. I have provided a long transitional period. The answer to the hon. Gentleman is therefore clear and negative.
I come to the corollary of what I have been saying. We as a country gain from inward investment in the various ways that I have described, but help to the assisted areas is paid for, to at least half its extent, by injury to non-assisted areas. That is inevitable, because the Government have no money. They can spend money only by raising it from the taxpayer or by borrowing. The money available in terms of subsidy has to be paid for.
There are a number of ways in which the projects that go to assisted areas—not inward investment projects—displace investment and jobs that occur in other ways. There is the sheer loss of investment and jobs that occurs as a result of the Government raising the money by extra taxes or extra borrowing to provide the grants. That loss of investment and jobs may occur anywhere in the country, including assisted areas.
Then there is the effect of the transfer of investment—and jobs—that would have occurred in the non-assisted areas but is induced, by reason of the grants, to move to assisted areas. That is a diversion of investment and jobs.
Then there is the displacement of investment and jobs that occurs when a project in an assisted area is subsidised and enabled to compete unfairly with a project anywhere in the country, including an assisted area, that is unsubsidised. That is a transfer of jobs and profits—and perhaps expansion and investment—from an unsubsidised project to a subsidised project.
There is also the displacement when a subsidised project is enabled to bid for scarce labour at the expense of a non-subsidised project. All those are offsets, sometimes in the assisted areas, but generally in the non-assisted areas, to the gain that, socially and economically, may make, to a large extent, good sense in the assisted areas. I explain that to the House only in order to illuminate the reality of the effect of the changes that are being proposed.
Labour Members are apt to speak of a huge loss in existing jobs as a result of changes in regional policy, but it is not like that under the Government's proposals. It may have been like that when the previous Government removed, at a fortnight's notice, £220 million of regional employment premium. That was a subsidy to jobs. I am not defending it, but its withdrawal may have damaged jobs in the assisted areas, though it may have done benefit to the economy and jobs as a whole.
We are reviewing and changing not an REP but the reduction, to some extent, of grants available to the initiation of projects and jobs rather than to the continuation of jobs. It is the removal, to

some extent, of help in order to reduce direct taxation. The money that is removed will not be destroyed, demolished or eliminated. It will be removed from one use and restored to the handbag or pocket of the citizen. There is no loss under the Government's proposals for existing jobs in the regions. There is some reduction—I will come to the quantity—in the new jobs that may go to the regions in future.
I shall explain briefly to the House what is familiar to many hon. Members. The best academic assessment that can be obtained of the total effect of regional policy up to date is that the net gain in jobs to the assisted areas, not only in manufacturing but in services, each year during the 1970s has been almost 20,000. I do not underestimate the scale of extra jobs. It is a net gain of jobs for the assisted areas.

Mr. Douglas Jay: Mr. Douglas Jay (Battersea, North)
rose—

Sir K. Joseph: I should be grateful if could finish my explanation. I will then give way to the right hon. Gentleman.
Except to the extent of inward investment, the marginal cases that are viable only where there are grants and to the expansion that may result from the increased profitability and cash flow that results from grants, the net gain of jobs in the assisted areas is offset by the loss of jobs elsewhere in the economy—including, to some extent, in the assisted areas. Therefore, it is a net gain that is offset largely elsewhere by the job loss that is consequent upon raising the money to pay the grants by diversion and by the two forms of displacement that I have described.
I shall illustrate the argument at its most intense. After my recent statement, hon. Members have insisted that the loss of jobs from the withdrawal over three years of £230 million from regional policy spending will be savage. Extreme words have been used and I have seen newspaper articles, particularly outside the national newspapers, reflecting that judgment. The best assessment that can be made from the academic work that has been done on the matter is that the loss of potential jobs—not existing jobs—in the assisted areas by that withdrawal over a three-year transitional period of £230


million might be about 5,000 to 6,000 jobs in the assisted areas.
As the money is being used to reduce the direct taxes on the public and because the taxpayers will keep more spending money in their handbags and their pockets, I am advised that the £230 million in the taxpayers' pockets will probably create about 5,000 or 6,000 extra jobs over the same sort of period and all over the country. The House will recognise that that represents a transfer of spending power from the Government to the taxpayer.

Mr. Jay: In order to be clear about the figures if not about the theory, may I ask whether the right hon. Gentleman's reference to 20,000 and subsequently 5,000 jobs means per year or over the whole period of the 1970s?

Sir K. Joseph: I was referring to 20,000 jobs per year.

Mr. Edward Rowlands: Who is the author of this academic work?

Sir K. Joseph: The author from whom I draw the statistics, although I must be responsible for their use, is Mr. Moore—[HON. MEMBERS: "Old Moore's Almanack"?] He has a partner, whose name eludes me at the moment.

Mr. Michael Foot: Will the right hon. Gentleman guarantee that the document to which he has referred will be placed in the Library?

Sir K. Joseph: It is a published document and I shall adopt any convenient method by which to draw hon. Members' attention to it. Perhaps a written answer would be appropriate in this case.
The analysis, which I draw from independent sources, gives the lie to the totally misleading aggregates that were quoted by the right hon. Member for Dartford (Mr. Silkin) in his capacity as Shadow Industry Minister. Many of the assisted areas projects would have gone ahead, and will go ahead, even when the development grants are reduced. The gain in jobs in the assisted areas is to a large extent, though not totally, offset by a loss of jobs in the country.

Dr. Oonagh McDonald: If I may help the right hon. Gentleman, the source to which he was referring is Moore

and Rhodes. They claim that over a 16-year period 540,000 jobs resulted from regional aids of various kinds that were given to the assisted and development areas. That figure is rather higher than the one that was suggested by the right hon. Gentleman. That was an increase in jobs above what might otherwise have been expected.

Sir K. Joseph: I am grateful to the hon. Lady for the reference to Moore and Rhodes. That corrects my lapse of memory. However, I pointed out that the jobs to which I was referring represented the annual results in the 1970s. Alas, the country's performance in the 1970s was not as good on average as the performance during the 1950s and the 1960s. During the 1960s, the economy was more buoyant for at least part of the time.

Mr. T. W. Urwin: I should like to take up the point that the Minister has made at least twice during his speech. He claims that a large number of projects for extensions and expansions would still have gone to the development areas without the benefit of regional aid. In all sincerity, I suggest that the right hon. Gentleman should produce some evidence to support that argument. From my long experience of matters, I believe that by far the great majority, if not all, of the extensions would have taken place only with the benefit of regional aid. I suggest that he should begin to concentrate upon the planned projects which now will not go ahead in the areas which are deemed to be subjected to reclassification, including areas of high unemployment in South and South-West Durham.

Mr. Rowlands: Mr. Rowlands rose—

Sir K. Joseph: I shall not give way to the hon. Gentleman.
There is ample evidence of projects that would have gone ahead anyway. As for the downgrading of some areas and the right hon. Gentleman's reference to projects that would not have gone ahead because of the reduction in grants available, I repeat that the areas have been down-graded only because on average their economic and employment position is better than that of assisted areas. I should be willing to study any circumstances that hon. Members bring to my


attention or to the attention of my Department. I cannot be fairer than that.
There is an obstinate gap in the economic vitality of different regions in the country. Earlier, I referred to the origin of the assisted areas. In nearly every case they were the depressed areas of the 1930s. In relative terms the gap has been narrowed, though because of the rise in the aggregate of unemployment the absolute difference between the unemployed in assisted and non-assisted areas has, alas, increased.
I repeat with all the emphasis at my command that redistributing taxpayers' money will not suffice in itself to eliminate the gap between the assisted and non-assisted areas. There has to be self-help in the assisted areas. There has to be enterprise, competitiveness, high productivity and a reputation for co-operation between management and the work force in the assisted areas if they are to reach the level of employment that we all want them to reach. We need more indigenous growth in the assisted areas. That is why the changes in climate and economic context which we have set ourselves to try to achieve are so relevant to the assisted as well as to the non-assisted areas.
I have a parallel announcement to make today on behalf of my right hon. Friend the Secretary of State for the Environment. The House will be aware that in the past there were set up a number of English regional economic planning councils. On these councils large numbers of thoroughly public-spirited and diligent people have served over the years. Their diligence and hard work have not always been rewarded by being heeded by Ministers, particularly in the Labour Government. It is a question whether it makes sense to ask these people to go on giving their services when they have no specific function and when their advice has all too often not been heeded.
I have to say that my right hon. Friend has decided, after careful consideration, that since these councils are not statutory and have no executive responsibility, it will be convenient for all concerned to disband them during the relatively inactive summer period, without waiting for the wider outcome of the Government's review of the public bodies to which

Ministers appoint members. My right hon. Friend the Secretary of State for the Environment has therefore decided to close them during the recess and is today telling all the chairmen.

Mr. Eric G. Varley: Shame.

Sir K. Joseph: The right hon. Member for Chesterfield (Mr. Varley), who was the Secretary of State for Industry, is now lamenting the death of bodies whose advice he did not much heed when they were around.
The regional planning boards of officials will continue in being under the chairmanship of Department of the Environment regional directors. In addition to their close working relationship with local authorities, the boards will maintain all other appropriate advisory contacts in the regions, by less formal means and with continued involvement of locally elected authorities. This decision reflects the inappropriate nature of these bodies and is in no way a criticism of the qualities of their members, to whom the Government are grateful for past services.

Mr. R. B. Cant: On a point of order, Mr. Deputy Speaker. Are there any constitutional precedents for announcements being made, and being referred to euphemistically as "parallel statements", on behalf of a Secretary of State for another Department? I cannot recall any precedent for this practice during my time in the House. Is this procedure acceptable? May we have your ruling? Will you consider requiring the Secretary of State for the Environment to attend the House to undertake this chopping exercise?

Mr. Deputy Speaker (Mr. Bernard Weatherill): The content of Ministers' speeches is not a matter for the Chair.

Sir K. Joseph: Further to that point of order, Mr. Deputy Speaker. I think that the House would have less reason to complain about being told this decision at the beginning of a debate than if this information had been given by my right hon. Friend the Secretary of State for the Environment, whose Minister of State is sitting beside me on the Front Bench, by means of a written answer, which he would have been entitled to do.

Mr. Kevin McNamara: Further to that point of order, Mr. Deputy Speaker. Is it not equally inappropriate to be given this information via a written answer, as occurred yesterday on two very important matters, as it is to be given it by means of a parallel statement made by a Minister who is not responsible for the matter in hand? Hon. Members are unable to question the accuracy of such a statement because we are unable to quiz the Secretary of State for the Environment about the purposes and ideas of some of the regional councils, which many people thought performed a useful function indeed in focusing Government attention on various matters, even if they did not heed the advice given.

Mr. Deputy Speaker: The Chair is not responsible for what a Secretary of State says. How he makes his announcements—by written answer, statement or speech—is a matter for the Minister.

Mr. Robert Hughes: Further to that point of order, Mr. Deputy Speaker. I had always understood that Mr. Speaker and the Deputy Speakers had some responsibility in protecting the rights of Back Benchers. Announcements made in this way are difficult to understand and to follow. Is the Secretary of State for Industry speaking only for the Secretary of State for the Environment, or is he also speaking for the Secretaries of State for Wales and Scotland? We should like to know where we are.

Mr. Deputy Speaker: It is for the Secretary of State to answer that question. I repeat that it is not a matter for the Chair.

Mr. Peter Hardy: Further to that point of order, Mr. Deputy Speaker. If several Government Departments sought to table statements on the same day, I think Mr. Speaker would deplore the practice. Since Mr. Speaker can deplore an excessive number of statements, surely the Chair can deplore the absence of any statement at all—and we have not had a statement today.
Would it not be appropriate for you, Mr. Deputy Speaker, or for Mr. Speaker to deplore the fact that, although reference has been made to the public-spiritedness of individuals who serve on

the regional planning councils, the Government do not share that public spiritedness to the point of ensuring that the relevant Minister will attend the House, or will authorise his Ministers of State to attend, to make a statement to this House to apologise for the decision which has been made? At least one or other Minister should offer a statement of gratitude to those concerned in the normal way.

Mr. Urwin: Further to that point of order, Mr. Deputy Speaker. In all seriousness, despite the laughter and smirking of the Secretary of State for Industry and some of his hon. Friends, did not the manner in which the statement was made constitute a grave discourtesy to the House of Commons? In those circumstances, is it not within the power of the Chair at least to draw to the attention of the Leader of the House the attitude adopted by the Secretary of State for Industry on behalf of his right hon. Friend the Secretary of State for the Environment?

Mr. Deputy Speaker: I have often heard it deplored when statements are not made to the House. It is not a matter for the Chair to rule when information should be given to the House. It is a matter for the Secretary of State how he does that.

Sir K. Joseph: I am offering to the House and to the country a combination of changed economic climate and a more concentrated set of assistance to the assisted areas. I believe that this is good news for the country as a whole and the assisted areas.

Mr. Robert Hughes: Further to the point of order, Mr. Deputy Speaker. In making a parallel statement to the House, the Secretary of State for Industry should tell the House on whose behalf he is making such a statement. What parallel is involved? Does it simply relate to England, England and Wales, or Scotland? We have a right to know what is happening.

Sir K. Joseph: England only.

Mr. Ioan Evans: Further to that point of order, Mr. Deputy Speaker. Is there to be any diminution of this function in Wales and Scotland? Are those countries to continue with their planning


councils? May we have a statement to clarify the position?

Sir K. Joseph: Further to the point of order, Mr. Deputy Speaker. I said specifically "England only".

Mr. Rowlands: As the Secretary of State for Wales is present, perhaps he will tell us the position in regard to the councils in Wales.

Sir K. Joseph: My right hon. Friend the Secretary of State for Scotland will confirm the position when he replies to the debate, but I did say "England only".

Mr. Rowlands: The point is that the Secretary of State for Wales is present in the Chamber. Will he tell the House whether this will apply to Wales?

Mr. Urwin: Further to that point of order, Mr. Deputy Speaker. What the Secretary of State for Industry has just said makes the whole situation even more intolerable. He is now making clear, as many of us have suggested over the years, that there is a good deal of discrimination against the English regions in the policies of successive Governments in institutionalising various organisations in Scotland and Wales. We are now being told, in a greatly discourteous manner, that the English regions are to be denuded of these planning councils but that such bodies will remain functioning in Scotland and Wales. That is quite disgraceful.

Mr. D. E. Thomas: Further to that point of order, Mr. Deputy Speaker. It is quite intolerable to Welsh Members that we are apparently having a statement by sleight of hand from the Secretary of State for Industry about the position of the economic planning councils in England, and that apparently we are to hear a statement at the end of the debate about regional planning councils in the context of Scotland, but that we are to have no statement from the Secretary of State for Wales about the position of the Welsh councils.

Mr. Deputy Speaker: These are matters to be taken up during the debate.

Mr. McNamara: On a point of order, Mr. Deputy Speaker. There is an important constitutional point at issue. There will be regional economic planning coun-
cils for Northern Ireland, for Scotland and for Wales, but all of those for the English regions will be abolished. We have not been given any explanation. In many of the English regions there are unemployment problems which future cutbacks will render far worse, yet all we have at the end of a rather dull speech by the Secretary of State is an odd sentence to the effect that the regional councils are going. That is not good enough. Will you, Mr. Deputy Speaker, protect us?

Mr. Deputy Speaker: I repeat that that is a question for debate. It is not a point of order. Certainly it is not a constitutional issue. It is a question of organisation.

4.52 p.m.

Mr. John Silkin: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof
condemns the Government's proposals for large-scale cuts in regional aids to industry, deplores the inevitable reductions in industrial investment which will follow them, and places upon the Government the full responsibility for the resultant loss of employment and the other adverse social consequences of its reactionary policies".
The Treasury Bench owes the House more than an apology: it owes the House a statement. There is no doubt that the difference between the English position on economic planning councils—I had some responsibility for them some time ago, as the right hon. Gentleman knows—and the Welsh, Scottish and Northern Ireland economic planning councils requires some justification. I do not intend to make heavy weather of what appears to me to be another bungle by the Secretary of State with regard to the order. The right hon. Gentleman said that that order was merely out by one day and therefore it had to be corrected in the autumn. He always tells us that he and his fellow Ministers are capable of running the whole of this country's industry, yet the events of the past week indicate otherwise.

Sir Keith Joseph: The right hon. Gentleman is wrong. That may be what his party thinks. The Conservative Party does not presume to think that it can run industry. Our job is to create the conditions in which industry runs itself.

Mr. Silkin: The events referred to by the Government in this House during the past week are a fair indication of what the conditions will be like in the country as a whole once their policies get under way.
On Friday, the Financial Times quoted one of the right hon. Gentleman's senior officials as saying that he was rolling back the map of regional assistance. No one can object to changes in the map. The right hon. Gentleman is quite right. Areas of assistance need to be kept under review. The more successful policy is, the more changes will be required. There is no doubt about that. But it is not upon that basis that the Secretary of State is rolling back the map. He is doing that for one reason only. Reward, not even for the average taxpayer but for a small minority, is at the root of it. The changes in the higher rate of tax threshold and the rates themselves will cost £662 million in a full year. The Secretary of State is making his contribution, and he has decided that regional aid will bear £233 million of the sum required. It is in that context that he has shaped the new regional aid policy.
The rolling back of the map is a response to the demands of the Chancellor of the Exchequer. It is not a policy in its own right. The Secretary of State has pointed out that the assisted areas currently cover more than 40 per cent. of the employed population. He proposes to reduce that figure to around 25 per cent. in order, he says,
to focus on the remaining assisted areas more effectively".—[Official Report, 17 July 1979; Vol. 970, c. 1302.]
It is possible to argue that such change provides a better use of resources in part, and that is what the Government argue in the motion. But it is arguable only if the amount of financial assistance as a whole is not cut. It will be cut by more than a third, and we already know where the cuts will come.
Special development areas in Wales, Scotland and the North-East are smashed. The creation of the new special development areas, so few in number, does not need to be considered seriously as an attempt to right the balance. We see the real effect of the Government's policy in the other changes. The whole of Lancashire and parts of Yorkshire lose their intermediate status.

Mrs. Elaine Kellett-Bowman: The right hon. Gentleman is mistaken. Very important parts of Lancashire, namely, Lancaster and Morecambe, do not lose it. Nor do the coastal regions whose fishing industries have suffered very badly.

Mr. Silkin: The hon. Lady, who speaks here and in other parts of the world, has her own view and her own constituency. I shall come to the constituencies of her hon. Friends in a moment. They are joined by a wholesale downgrading of development areas, which after the transitional period will not be eligible for regional assistance at all. The hon. Lady cannot deny that, nor can it be denied that in many cases it is that assistance alone that has enabled British industry to survive at all, faced with a massive growth in foreign imports. Our footwear, textile and clothing industries are to be the victims of the Chancellor's generosity to that small minority of taxpayers who are already in a far better financial position than the rest of the community.
These changes have been made not to update but to bolster a socially divisive policy of the Government. They will be resisted root and branch by the Opposition. The more that Government supporters learn about the effects in their own constituencies, the more trouble they will become. It will be a case of general approval in public and individual deputations in private as each of them tries to get the axe removed from his own area.
Under these proposals there will not be much joy in getting back intermediate status. The 20 per cent. rate of grant on new building and works will have disappeared in 1982. It is impossible to discover from anything that the Secretary of State told us what advantages will remain. Those hon. Members who breathed a sigh of relief when they learnt that their constituencies still enjoyed development area status may have escaped beheading but they have not escaped major cuts, since the rate of grant drops by a quarter to 15 per cent.
The effects of these changes will soon be felt. I challenged the Secretary of State the other day to tell the House what numbers of unemployed his advisers had told him would be likely to result from the cuts and what number of expected jobs would now not be created. He


told me that he had not felt the need to get such advice because the whole of the regional aid policy provided net only 10,000 new jobs a year. I did not accept those figures.

Sir Keith Joseph: Manufacturing jobs.

Mr. Silkin: The right hon. Gentleman did not say that at the time.

Sir K. Joseph: I referred to the net gain of manufacturing jobs in the assisted areas. My figure today was the net gain of manufacturing and service jobs.

Mr. Silkin: I am glad that the right hon. Gentleman, having made that statement, has corrected it now. I make no point about that. He obviously had manufacturing jobs in his mind. Having looked at the figures supplied by the Cambridge Department of Applied Economics, the Secretary of State has passed on to us its figure of 20,000.
My hon. Friend the Member for Thurrock (Dr. McDonald) raised an important point because she took it over a much larger time scale. That is important, because we are projecting into the future. But suppose that the figure was only 20.000 net jobs a year, 20,000 families in work. Is that figure really of such insignificance that a man who has proclaimed that the family must be the centre of our thinking looks upon it now as something that can be so curtly rejected?
The Secretary of State rested his case on two fallacies. The first is that regional policy does not work. But an examination of the relevant facts and figures shows the opposite. Thanks to a strong regional policy, the economies of the less prosperous regions have consistently grown at a faster rate than the national average. Unemployment in the assisted areas, because of regional policy, has risen much less rapidly than in the rest of the country since the onset of the world recession. In other words, aid to the regions has helped them to weather the economic storm. By no means least important, regional policy has saved jobs and has created new ones.
The Secretary of State's second fallacy is that there is a precedent for a slashing reduction in regional aid. The right hon. Gentleman says that the Labour Government did not hesitate to abolish

the regional employment premium. That is true. The regional employment premium was withdrawn by the Labour Government. But the Secretary of State neglected to point out that the regions directly benefited from major increases in expenditure or other programmes to compensate for the withdrawal of the regional employment premium.
Various categories of regional aid, such as section 7 assistance, were increased by more than £160 million over the following two years. By this time, too, expenditure on section 8 assistance and the special employment and training schemes, initiated by the Labour Government, had increased by over £300 million, much of which went to the assisted areas.
An effective regional policy must have an effective carrot in the grant system. But there must also be the stick of refusal for certain projects in other areas. That is the basis of the IDC system. I shall not disguise from the House that such a policy has its strains and its difficulties. The hon. Member for St. Marylebone (Mr. Baker), who has notified me that he could not be present after I warned him that I might mention him, suggested recently that the whole of my constituency of Deptford was clamouring for the abolition of IDCs. Deptford,—indeed, most of inner London and inner Birmingham—wants new industry. But before hon. Members representing constituencies in these areas cheer too loudly at the relaxation of IDC control, I would point out that this step will not help to ease their employment problems.
The new limit will mean that factories between 12,500 sq ft and 50,000 sq ft will no longer come to the attention of the Department of Industry for steering to the inner areas. Instead, factories will spring up where they find the environment more congenial, not in inner areas but in commuter land or on the coast. So the inner city will not benefit from these changes in IDC control. We shall have to wait and see whether the inner city programme, started by the Labour Government, is continued or falls victim to the next lot of Tory cuts.
The 50,000 sq ft IDC limt will dramatically cut the number of jobs created in the assisted areas. It is estimated that IDC policy alone—the Secretary of State did not spend much time dealing with this


matter—created about 100,000 jobs in the regions in the 1960s. The new limit will make the whole policy redundant. From now on, a factory employing about 200 people will escape the IDC net. Moreover, administrative practice, as the Secretary of State well knows, is normally to allow an extension at least as large as the IDC threshold. Effectively, factories of up to 100,000 sq ft, capable of employing up to 500 workers, would be lost to the regions.
The regions have also benefited from the National Enterprise Board. The Midlands, in particular, gained work from the NEB. By his own admission, the Secretary of State cannot totally kill that goose, although he proposes to flog off some of its golden eggs. As the right hon. Gentleman himself says,
… it will take time to restore the full vitality of the private sector."—[Official Report, 18 July 1979; Vol. 970, c. 2005.]
The Secretary of State accepts, in theory at least, that an element of regional policy lies with the NEB, namely, that the NEB should continue to exercise an investment role in the North and in the North-West and with small firms. But the right hon. Gentleman goes a strange way about it. His proposals are not so much a policy or a succession of cuts but the flogging off of £100 million worth of national assets.
Neither of these plans is likely to give much assistance to the regions or to the small firms that the Secretary of State consistently tells us are the keystone of industrial success. Small firms in the regions are dealt a body blow by raising dramatically the minimum values at which RDGs are payable.
The truth is that there is no coherent policy behind the Secretary of State's proposals. A full-blooded Selsdon approach would have cut off the regions from any assistance whatever. As the Secretary of State said only a year ago,
In aggregate, we believe that these subsidies and grants do more harm than good … Anyway, these grants and subsidies may rescue some jobs but only at the cost of other jobs."—[Official Report, 4 July 1978; Vol. 953, c. 255–56.]
The right hon. Gentleman was back on that theme today, but he had modified it somewhat. What has made him change his mind is a small dose of reality. Faced with the power to make the decision, he

has faltered and drawn back from the brink. We take some comfort from this backtracking but not much. What is needed is a positive policy, not a negative reluctant drift.
Our business as citizens, said Bernard Shaw,
is navigation. Learn it and live, or leave it and be damned.
The Secretary of State has chosen to leave it and be damned. Yet there are changes that he could have made. In so doing, he would have had to throw away the half-baked ideas that he has culled from a dozen volumes of out-of-date theory and accept that regional policy is not just an act of rescue in a moment of charity but a vital necessity to the industrial well-being of our country.
There are many lessons to be learnt from our membership of the EEC, for good or ill. We all have different ideas about them. One of them that all of us know is that market forces, left unfettered, created the golden triangle in mainland Europe at the expense of the outer regions of the Community. The resulting social pressures and divisions are the direct result of the operation of these market forces.
A real regional policy will reduce social divisions by creating jobs where they are most needed. Here, as Shaw said, it is navigation that we need. That is why the NEB is so important in the regional and other contexts. It can help channel investment to the regions. It can assist small and medium firms, but to do this it needs more resources. The answer lies in increasing its funds, not in cutting them; in increasing its powers, not curbing them; and in ensuring that initiative in industry can draw upon public sector funds to promote jobs for the future when the private sector, as so often, fails to do so.
There is no evidence that the Secretary of State is assisting in any other way the small firms in the regions. I have referred to the increase in minimum values for RDGs. The right hon. Gentleman has no plans to give these firms any greater assistance. Indeed, the downgrading of so many areas will be a death blow to many of the small firms. It could be argued that the system of aid might be further refined. I agree. The larger companies should have to prove that they


will create new jobs and that the money they receive in grant will not merely be an addition to profits with no social return. In general, the Government should be seeking to give more help to the regions, not less, and ensuring that those resources are given selectively rather than automatically.
The Government motion promises that regional aid will be made more cost-effective. In Opposition the Tories made a great fuss about the huge amounts of Government money that were helping to finance capital-intensive projects by chemical and petrochemical firms.
Once in office, did the Secretary of State stand firm on his principles and make such projects ineligible for RDGs? No, he did not. A little arm-twisting from the CBI and from the firms involved and the Secretary of State caved in, as, in the end, he always will.
No serious observer of British industry would try to deny that we need to build up the industries of the future while ensuring the ordered contraction of a number of industries whose future is limited. The Secretary of State's approach will certainly result in the contraction of our basic industries. However, where are the new jobs to come from now that he has emasculated the NEB and cut aid to industry? How will he alleviate the real suffering in the areas most affected by restructuring if, at the same time, he insists on slashing financial assistance to the regions?
Industrial restructuring must mean a more powerful regional policy, not a much reduced one. The Secretary of State for Employment understands that well. He fears the return of a two-nation Britain if something is not done to help the poorer regions.
Earlier this month, in a speech to the Tory Reform Group, the Secretary of State for Employment referred to the gap between the prosperous South and the poorer North. He said:
Inequalities of the kind we now see in Britain simply cannot be tolerated. They represent a serious threat to the fabric of society.
The Secretary of State for Industry not only tolerates these inequalities but by his regional aid policies he seems determined to make them worse.
That is why only three months after the general election people are already asking the one relevant question "What will the next Labour Government do?" They are beginning to realise just how disastrous the Secretary of State's policies are. I shall answer the question.

Sir Timothy Kitson (Richmond, Yorks): What about Grimsby?

Mr. Silkin: If the hon. Member for Richmond, Yorks (Sir T. Kitson) wants to have a private conversation, I hope that he will wait until I have finished my speech.

Sir T. Kitson: I remind the right hon. Gentleman that parts of the North-East, of which my constituency forms a part, were taken out of the North-Eastern development area just before the Grimsby by-election. Has the right hon. Gentleman forgotten that?

Mr. Silkin: My complaint was not that the hon. Gentleman made an intervention but that he made it across the Floor of the House and was not addressing me. I regard that as a gross discourtesy to the House. Changes in the map are bound to occur from time to time. There is nothing wrong with that. I was saying that the Secretary of State's reasons for making the changes now are wrong.

Mrs. Kellett-Bowman: Will the right hon. Gentleman give way?

Mr. Silkin: The hon. Lady's mouth is full of questions.

Mrs. Kellett-Bowman: The right hon. Gentleman says that there must be changes in the map. Is he aware that only the week before the Government made Grimsby a development area the Minister said that there could be no changes in Lancaster where the unemployment rate and unemployment vacancy ratio was higher than in Grimsby? On the eve of the by-election, Grimsby was made a development area even though its unemployment rate was better.

Mr. Silkin: I said earlier that of course the map should be changed from time to time. The hon. Lady is wrong to think that unemployment is the only factor to be considered.
I know why we won the Grimsby by-election. We won it because we had a fishing policy and the Conservatives gave


the fish away. If the Under-Secretary of State doubts that, he should examine what happened in Grimsby at the general election.

Mr. Straw: The hon. Member for Lancaster (Mrs. Kellett-Bowman) suggested that there was a political motive behind the granting of development area status to Grimsby. Does my right hon. Friend agree that this Government have allowed Blackpool to be an assisted area and left Blackburn out, in spite of Blackburn's higher rate of unemployment? What explanation can there be other than that one area is Conservative-controlled and the other Labour-controlled?

Mr. Silkin: I have no doubt that my hon. Friends, in public and in the House, and the Secretary of State, in private in the Department, will make good constituency points, many of which are political. However, if I had gone through that list my speech would have lasted 46 hours.
What would a Labour Government do? It would be easy to say that we would repeal this or that measure and go back to what it was like before. However, life is not as easy as that. While the Secretary of State continues his present policies we are likely to encounter an economic disaster. That means that we shall have to look carefully at all our policies. The next Labour Government's approach to the regions will certainly contain a number of elements which I shall describe.
First, there must be more resources for the regions, not less, as proposed by the Secretary of State. Second, the resources will be made available selectively rather than automatically. Third, we shall have a system of planning agreements. They will help to maximise the effectiveness of regional policy. They will enable the Government to examine company plans as a whole at an early stage rather than piecemeal and at the last moment. They will mean that the carrot of public money and the stick of IDC control will be used together. Fourth, we shall increase the funds available to the NEB.
One of the most commendable of the Secretary of State's qualities is his total intellectual honesty. As the years go by, he never spares himself—or us—from the baring of his soul. He makes no excuses.

He indulges in no prevarication. He simply gives us the benefit of each successive discovery that the whole of his previous policy was wrong. The strength of his previous convictions—and they are strong at the time—are as putty compared with the strength of his conversions when the time comes.
There could have been no more forceful a Minister for housing. I made my maiden speech when he was Minister for housing. He pushed his policy through relentlessly. Today he tells us—not without pride—that he was utterly mistaken.
I recall the days in Committee when we attacked the right hon. Gentleman's reorganisation of the Health Service. We said that it was bureaucratic, undemocratic and cumbersome. He brushed our objections aside. He knew—well, he knew at that time—that he was right. In addition, he had what Disraeli called "the best repartee"—a majority. Now he beams happily while his hon. Friends attack the Health Service that he created and confesses that his policy was totally wrong.
So it will be with the right hon. Gentleman's regional proposals. The years will go by. The damage will be done. Investment, particularly in the areas where it is most needed and where it can do the most good, will fall. The dole queues, which are already too long, will lengthen further.
When at last another Labour Government comes back to deal with the neglect of years, there standing at the head of the queue attacking the neglect will be the right hon. Gentleman. In the meantime, much needless suffering will be caused.
We attack these proposals, conscious that they form not so much a policy of action but a policy of drift. Shaw said that if navigation is our business it should not be entrusted to a drunken skipper. He said:
It is the man who lies drinking in his bunk and trusts to Providence that I call the drunken skipper, though he drank nothing but the waters of the River Jordan.
There could hardly be a more apt description of the leaders of the present Government. What our country needs now is not drift but navigation. In failing to provide that navigation the Government have failed the nation. I call upon the House to support the amendment in the Lobby tonight.

5.21 p.m.

Mr. John Patten: I am grateful to be called, though I am conscious that the time is never right to make one's maiden speech and I know that this afternoon, when so many others wish to speak, that must be especially so. One of my noble predecessors as Member for Oxford, Viscount Valentia, clearly thought that the time was not right to make his maiden speech for a very long time. He took his seat in 1895 and uttered his first words in the House 11 years later in 1906. I decided that in my case 11 weeks or so is about the right length of time to leave it.
I am honoured to have many noble predecessors in Oxford, and one, my noble Friend the Lord Chancellor, once described the city and constituency of Oxford as nothing but the Latin quarter of Cowley. There is more than a grain of truth in what my noble Friend said, for, great university though it contains, and a notable polytechnic, amidst an urban landscape that makes it one of the most beautiful cities not only in this country but in Western Europe, it depends for a great deal of its prosperity, not only in the city but in the region around, on the prosperity of the British Leyland plant at Cowley.
I am extremely glad that in recent months—indeed, for about the past year—the people who work at the BL plant at Cowley have shown such splended increases in productivity and splendid increases in the quality of the motor cars which they have been producing. At a meeting I had this morning with the chairman of British Leyland, Sir Michael Edwardes, he was pleased to make that point.
My right hon. Friend the Secretary of State for Industry, in reply to a question after his statement last week on the future of the National Enterprise Board, said that he praised the management of BL for the changes in attitude that they had been able to bring about in that company. I am sure that my right hon. Friend will recognise also that those changes in attitude are possible only with the full-hearted co-operation of all who work at Cowley and at other BL plants, and I am glad to see that that has been as forthcoming as Goverment support has been forthcoming.
If there is a financial burden on the Government and a practical burden on management, there also must be a strong moral burden on trade union leaders, in my constituency and elsewhere, to make sure that in a company such as BL—which has had more than its fair share of troubles—increases in productivity, changes in manning procedures and de-manning happen all the more easily.
Both the university element of Oxford, the university, the polytechnic and the great teaching hospitals—the gown side—and the motor industry side—the town side—have been extremely fortunate in those who have represented them in the House. I wish to refer not only to my immediate predecessor but to his predecessor, my old friend and mentor Monty Woodhouse. He worked hard on behalf of Oxford, as did his successor, Mr. Evan Luard. Their epic battles for victory in Oxford in the general elections of the 1960s and 1970s may have resulted in something that sounded rather like a football score—Woodhouse three, Luard two. I should like to reassure Mr. Luard that, although he may have won fewer general election victories over the past 20 years than did Mr. Woodhouse, his services are greatly appreciated by all those in Oxford who were his constituents, including myself, over the past 10 to 15 years.
Oxford has never been, and I hope that it will never be, an assisted area. In that sense, it is an extremely fortunate part of the country. It has never had any assisted area status, although I freely recognise that BL has had considerable direct Government assistance. Oxford has a low rate of unemployment compared to many of the constituencies represented by other hon. Members.
Oxford is approximately in the middle of England, and that location allows me to look north and south rather more dispassionately than can some hon. Members on either side of the House. I shall restrict my remarks on regional policy to England, as I do not feel that I have the experience to comment on other parts of Britain.
It is interesting to speculate on what might have happened to the regions and to regional development in England had the Special Areas (Development and


Improvement) Act 1934, and the legislation that followed it, not taken place. The preamble to the 1934 Act—I am speaking only from memory—talks not only about economic development but about social improvement. It is critical to today's debate that we look not only to economic development but also to social improvement.
Looking back at that Act is a fairly gloomy experience, because the first schedule to it, which lists all those places in England and other parts of Britain which were to receive regional aid, demostrates how clearly our regional policy over the past 45 years has failed. The present list of areas receiving assistance in one form or another from the Government is, with a few notable additions such as Merseyside, more or less the same.
Therefore, whatever else we may say about our regional policy over the past half-century, it can hardly be said to have been especially successful in all its ramifications. If we stand back from it, we can see that we are dealing with a historic problem and we will have to use historic solutions to try to solve it. It would be hopeless to think that we could solve it in a very short time.
Looking at the history and geography of England and the rest of the United Kingdom, we see that the sort of regional problems that we are dealing with have a historical inevitability all their own. Throughout the history of England, it has always been in the southern part of the country that the majority of people, for better or worse, have preferred to locate most of their economic activities, except for that brief period in the late eighteenth and nineteenth centuries and the early twentieth century, when coal was king and the whole axis of development turned north-south.
What we are discussing in the debate and trying to deal with in the Government's regional policy is picking up the tabs from the legacy of that movement. If we stand back from the history of regional development, looking not at last year's changes or at whether regional employment premium was put on or taken off or whatever but at the problem in its total historical and geographical context, that must be seen to be true.
We shall, I think, see the northernmost regions of England, in particular, remain-

ing in need of substantial assistance from Governments of whatever colour for a substantial time, just as they have needed it for most of the last half-century. Conscious as I am of the need in a maiden speech not to be controversial, I say at once that I do not thereby belittle for one moment the continuing economic, social and cultural benefits that flow from those regions. But we must take a long-term view of those most depressed areas, especially in the northern, north-eastern and north-western parts of England, while, I suggest, using an entirely different strategy for other parts of England—and, I dare say, other parts of the United Kingdom—which have less deep-seated economic and social problems. In the strategy that my right hon. Friend the Secretary of State for Industry has begun to unveil, I can see a much more sensitive attitude towards and identification of the true nature of the problems and, therefore, of their solutions.
I was delighted to hear my right hon. Friend in his introductory remarks point to the importance in regional policy of taking into account not only economic but social desiderata, just as the preamble to the 1934 Act had it. In that respect he is exactly right. He is only too well aware of the effects that changes in policy have upon the economy and the society of the regions that are affected. He has it exactly right in loading such help as is available on the regions that need it most. That is economically sensible and it strikes me as being extremely socially correct.
That is the sort of attitude that we have learnt to expect from my right hon. Friend. I risk praising someone on the Government Front Bench in my maiden speech as I know that it will be the only time that I shall be able to do so without Labour Members shouting "Give him a job."
I believe that my right hon. Friend is a most compassionate man. The elements of regional policy that he is outlining are economically correct and socially compassionate. We need to look long and hard at the real problems of regions and regional development and not imagine that they will be solved merely by an endless amoeba-like growth of assisted areas.
There are different problems in different parts of the country. There are the really


depressed regions and other regions that have more disparate problems. I agree that assisted area strategy is economically and socially correct for the areas that have the deepest-set problems, but for other areas—for example, the areas from which the Government are withdrawing—I suggest that other types of aid under the Industry Act 1972 and other forms of Government assistance are much more applicable. It may be that we shall see regional policies taking off in two separate directions, each fitted to suit the problems more than some ideology or idea.
The right hon. Member for Deptford (Mr. Silkin) concluded his remarks by quoting my right hon. Friend the Member for Lowestoft (Mr. Prior). In a recent speech my right hon. Friend said that we must not create two nations in the United Kingdom. I entirely agree with my right hon. Friend and with the right hon. Gentleman. It strikes me that the way of preventing the two-nation concept becoming not merely a threat but a reality is to load such help as we can offer from entirely limited national resources, in an economy which for the moment is growing but slowly, on the areas that need help the most.

5.32 p.m.

Mr. Tony Benn: It falls to me to congratulate the hon. Member for Oxford (Mr. Patten) on making his maiden speech, which he did without a note, with great confidence, good will and an absence of controversy. My right hon. and hon. Friends will appreciate the hon. Gentleman's kind reference to Evan Luard and will remember Mr. Woodhouse who preceded him, and even the present Lord Chancellor who once represented Oxford.
I leave the hon. Gentleman with one paradox on which he might like to reflect. In Oxford there are two great industries—the university and the motor works. The motor works have to fight in the hard and harsh world of competition. The university, like all universities, is exempt from anyone asking it whether anything it does brings any return to anyone. Yet it is the professors who live in a secure atmosphere free from market forces who are usually the most forward in telling everybody else to face the harsh realities

of life. If some of the professors in our universities, who have never been asked to justify any of the work that they do in economic terms, and who are quite properly maintained because what they do is worth while, were to appreciate the necessity of maintaining manufacturing industry even during the difficult years when market forces tend to contraction, we might have less of the two intellectual worlds in the United Kingdom that we now have.
Those remarks take me on to what I wish to say in the debate. My contribution will be brief because I appreciate that there are many hon. Members who want to speak about their constituencies. However, having twice been the Minister responsible for regional policy, I wish to make one or two comments.
The honesty of the Secretary of State for Industry is often commented upon. We have heard his analysis on an endless number of occasions. In the past 40 days we have had an opportunity to understand what his policy really means to the British people. The regions are not exempt from general policy decisions. The significant events that will take place in areas of high unemployment as a result of the first two months of the Government's policy will flow not only from the changes in the boundaries but from the cuts that will be made in public services and that are still being argued about in the Cabinet.
Significant events will flow from the raising of the minimum lending rate, which will have a bad effect on businesses in development areas. They will flow from the terminal grants for shipbuilding—two years and then withdrawal. Shipbuilding, like mining and parts of the steel industry, has always operated mainly in areas of high unemployment. The end of exchange control and the dismantling of controls over international industry, in so far as they existed, will have the effect of accelerating branch factory closures that many development areas have experienced so seriously in the past.
The failure of the Secretary of State, who is an attractive lecturer to the House on his own philosophy, is that he failed to make clear that the policies to which he is attached are to be implemented at a moment when the Western industrialised world is probably dipping from recession


into a slump that many world economists believe will continue throughout the first part of the 1980s.
Why does the House imagine that President Carter is so worried about the oil situation? He is worried not only about oil supplies but about the impact that the present situation will have on the United States dollar. OPEC deficits will build up again as a result of the increase in the oil price. There will be the influence of the IMF in forcing countries to cut public expenditure. These factors will tip the world back into a severe recession. As we know very well, the parts of Britain most affected when the country is in recession are the development areas. At this moment a policy that was born out of the 1930s slump is to be whittled away, if not dropped, as we enter a serious world situation made worse by the fact that Britain and British industry have suffered from underinvestment over a long period. When profits were high, companies said that they did not need to invest. When profits were low, they said that they could not afford to invest.
As a result of the clutch of policies announced since 3 May we shall witness substantially higher unemployment. I wish that the Secretary of State, who is so keen about eliminating waste, would take account of the loss of production due to even our present levels of unemployment, which runs to about £10 billion worth a year. I wish that he would consider the cost of unemployment pay and redundancy pay, which comes to about £4 billion a year. If the forecasts are right—they are quite cautious ones—and there are 2 million unemployed in 1980, the public sector borrowing requirement will have to take account of even higher increases arising from unemployment.
The contraction of British manufacturing industry will be made worse by the cuts in support that have been announced, by lower public expenditure, by higher imports that are coming in as a result of the oil revenues and by keeping the pound high. Hon. Members, especially those representing development areas, are bound to be concerned because if there is a world recovery so much damage will have been done to our manufacturing industry that when British industry tries to re-equip there will be a flood of imports and a short fevered

boom followed by a balance of payments crisis that will blank off British recovery at the moment when the recovery of some of our major competitors can go ahead.
It would be wrong for this debate to continue without this being plainly said. When our manufacturing industry has been cut back in a way that is inevitably going to follow present Government policy, including regional policy, and we must re-enter the world oil market when oil will be $60 a barrel, we shall not have the money to pay for it. This country will be confronted, as were other countries in the past, with emigration of our skilled people as the only way in which we may manage. The whole of development area policy was designed to check as far as possible the emigration of people from Scotland, the North-East and the North-West to the South of England. There will be an accelerated export of capital, for the Government have carefully said that they want profitable industry at home with no restraint on the export of that profit as a result of lifting exchange controls.
The House would be foolish if it did not look one stage ahead at what can happen when unemployment levels reach the levels we may experience, on the basis of present policies, before the 1980s are out. Anyone who thinks that unemployment does not matter any more—as there is neither starvation nor destitution as there was in the 1930s—misunderstands the disruptive effect of unemployment, even in a society that has minimum levels of unemployment pay. It is divisive, it creates bitterness and it is destructive of business confidence. If business men see the social disruption that will inevitably follow from the Government's divisive policies, they will not invest in the regions of this country. They will seek greater security elsewhere.
We should be foolish not to consider the possibility that if the Government's industrial policy has the effect that is widely expected we might end up, in some respects, in a law and order situation. Anyone who looks at Northern Ireland, where there are a sectarian dispute and high levels of unemployment, can see what social disruption does to an area that is deprived of hope, employment for its youngsters, and a perspective for its people.
The policy will fail economically, industrially and morally. Many people—I am one of them—believe that high public expenditure is a moral obligation on a society and not just something that must be justified by its economic return. Some people believe that maintaining proper standards of education, health, housing and the environment is what a civilised society owes to its own people. If there is a scaling down, as is expected, of the levels of public provision, which over several generations people have been led to expect, and if there is a withdrawal of the Government from the economy on the basis that market forces will necessarily benefit the community as a whole, the opposition to the Government's policy will be much more formidable than they imagine.
Perhaps the Government are dreaming of a danger, as they see it, of a re-run of the 1970–74 confrontation. It will be much more than that. The people of this country are entitled to expect that the Government that they elect, whatever their political philosophy may be, will see it as their job to try to maintain full employment. They expect the Government to ensure that areas adversely affected by market forces—which may affect the prospects of an industry but for which there is no moral responsibility on those who work in those industries—are given a perspective of growth and development comparable to that in areas where, perhaps for other reasons, market forces are working better. People are entitled to expect that the benefits that flow from those areas of the country where industry is successful shall be deployed, in part, in maintaining and expanding public provision in other parts of the country.
Indeed, if we consider the 1930s, to which I referred on a previous occasion, it was massive public expenditure, in the form of rearmament, that ended the slump. Nobody wants to return to that solution. However, the Government, at exactly the wrong moment in our history, have decided to cut back on public expenditure which alone can bring our own people back to employment in the whole country and especially in the development areas. The Government are setting us on a course that will deepen the depression. shut out the hopes for young

people leaving school, make it harder to develop the new technology, and reduce the quality of life.
In the end the mandate argument will not be sufficient to overcome that criticism, for a mandate is a wasting asset. No one disputes the outcome on 3 May. The Secretary of State for Industry, as the main architect of this policy, is trying to reverse a consensus around which many generations of Ministers have been working to improve the lot of our people. The niggling, mean policy of scaling down regional aid will cost him dear when he and the Government have to account to the people who elected them.

5.46 p.m.

Mr. Michael Colvin: Thank you, Mr. Deputy Speaker, for calling me in this important debate.
I begin by adding my congratulations to my hon. Friend the Member for Oxford (Mr. Patten) on his excellent maiden speech. I am glad to have postponed my maiden speech until now as it has given me the opportunity to make many new friends on both sides of the House and to appreciate that probably 90 per cent. of us in this place agree on 90 per cent. of what we are trying to do. There is much common ground and great willingness to be kind and helpful to new Members like myself that we all greatly appreciate.
This evening is a far cry from my first day in the House when we assembled, with the dust of the hustings in the air, to re-elect Mr. Speaker to preside over us with his Welsh wizardry and humour. On that first day I looked at the members of the Opposition who were uncomfortably seated, wearing red ties, glum expressions and revolutionary looks. I was shocked to realise that part of what I said about them in the election was probably true. However, I realise that to achieve anything in this place it is important to see the other side's point of view. I travelled by a tortuous route to the opposite Gallery and viewed the Government side of the House. What I saw was rather worse—row upon row of navy blue suits. I am glad to say that we have now all regained something of our original individuality.
It is hardly surprising that on that first day, when the Chaplain arrived to take his place before the Chair, he first looked


at the assembled Members and then prayed for the nation.
It is for the good of the nation that we debate this evening. Although this is a debate on regional industrial policy, it is more than anything a debate about people. Regional policy is a carrot-and-stick business. I applaud the way in which the Government concentrated the carrots in those areas of the kingdom in most need and, at the same time, reduced the stick with which they can deny industrial investors, by means of industrial development certificates, the freedom to go elsewhere.
The second part of the policy will cause the flags to be hung out on 6 August in the great and historic city of Bristol, whose electors have sent my hon. Friend the Member for Bristol, West (Mr. Waldegrave) and myself to join the three other distinguished right hon. and hon. Gentlemen who also represent Bristol constituencies.
I am about as different from my predecessor, Mr. Ron Thomas, as he was from Martin McLaren, who preceded him, but one thing upon which we are all agreed is the dictum of an earlier Member of Bristol, Edmund Burke, who said that he wanted to be a Member of Parliament, to have his share in doing good and resisting evil. Ron Thomas's methods may have been a little different from my own, but I believe that his heart was absolutely in the right place. He certainly did his best to continue the unparalleled standard of constituency service of his predecessor, Martin McLaren, for whom the people of Bristol, North-West have a lasting devotion and affection, quite irrespective of the way in which they usually voted. I am sure that all Members of this House, Mr. Deputy Speaker, will join me in wishing Martin McLaren a very speedy recovery from the most serious illness which now besets him.
For many years the city of Bristol has enjoyed a balanced economy, but over the last decade there has been a growth in the proportion of commercial and service jobs, at the expense of manufacturing. Unemployment, having been traditionally about half the national level in Bristol, has grown to around the national average. I believe that this is due in part to the need to clear the IDC hurdle, with its 15,000

sq. ft. exemption limit. That limit is now to be raised to 50,000 sq. ft., which will enable the wealth-creating industries, which the country needs so desperately, to come to our area if they so wish.
Bristol is typical of many other cities in the land which can act as pump primers for our economic recovery—provided that the Government will first create the climate of confidence in which investors are encouraged to take the risks involved in all new business. It is worth recalling that still by far the greatest proportion of new investment in industry is found from retained profits. If there are no profits, there is no new investment and therefore there are no new jobs.
I believe that the nation's ability to finance support for those remaining assisted areas in our country will depend largely on the wealth that we generate elsewhere. In the past, by restricting new development in the non-assisted areas, we have been cutting off our noses to spite our faces.
Bristol is a city which enjoys great advantages of position, communications, environment and attitude to work. We have an excellent industrial relations record, a highly skilled work force, and a tradition of technical and technological advance and free enterprise, all now waiting for the green light which is soon to come.
The leading industries in my constituency of Bristol, North-West are aerospace and agricultural manufacturing, which, together with the Avonmouth docks and the chemical companies in Avonmouth, employ nearly 20,000 people. Nearby, at Filton, we have the most comprehensive aerospace complex in the world, with facilities for research, development and manufacture of aircraft, rockets, missiles and engines, together with the flight testing facilities which came to us not long ago from Fairford nearby.
The measures proposed by my right hon. Friend the Secretary of State for Industry, though very welcome in our city, are probably not so welcome—at any rate initially—in the Principality across the water from us, or in some of the other assisted areas which may be demoted by my right hon. Friend's plans for, quite rightly, concentrating the help where it can do most good.
It is the nature of this help that I should like to question this evening. It is based on


regional development grants of various percentages on capital expenditure incurred for the provision of new plant and machinery, buildings and works. I question whether capital expenditure should be the only basis for grant aid. An objective of my right hon. Friend's regional selective assistance policy is
To provide more productive and more secure jobs".
In the long term, I am absolutely certain that this is what will happen. But perhaps my right hon. Friend could, in his ongoing reviews of the Government's regional industrial policy, look once more at the concept of employment grants. We are giving aid in order to provide work in the assisted areas, but today, as industry enters a second industrial revolution, no less dramatic than the first, investment will be in plant and machinery that is largely automated rather than in people. Yet it is workpeople whom the aid is intended to help.
There are still many labour-intensive industries in existence. Surely they are the companies which could be encouraged to go to the assisted areas. Many are already there, and there are many small businesses which could start up and expand if grants were based more on the number of people they were to employ rather than on the amount of capital invested.
My right hon. Friend might like to consider, as an alternative to capital grants tied to the investment in plant, machinery and buildings, that grants might be based on the average number of people employed, in order to encourage labour-intensive industries.
We have in the past tried the selective employment tax refunds and the premiums. These were followed by the regional employment premium, which was scrapped by the Labour Government in 1977. Both were payroll subsidies, but in some cases I know that there were industrialists who used the cash to subsidise plant investment. But this often, in turn, reduced the number of jobs that were to be made available. It cannot be beyond the capabilities of the Department of Industry to devise a formula which would enable more help to go to labour-intensive industries than to those that were largely automated.
Such a policy would, I submit, first help to win the co-operation of the trade union movement, without which it will be very difficult to achieve the removal of restrictive practices, and the mobility between trades that is required to increase productivity. Second, it would help to avoid the skills shortage that is so often experienced by capital-intensive industries which go to the assisted areas, when such industries would be better located, dare I say it, in cities such as Bristol, where technology already flourishes and skilled labour is perhaps more readily available.
The structural change in employment to which I have referred will gather momentum. Modern industry will continue to replace workers with machines wherever possible, in factories and in offices. This decline in jobs comes at a time when the number of people who want to work, especially women, is steadily rising. The problem of unemployment among the under-25s, particularly school leavers, is acute. No number of job creation schemes, work experience programmes or community projects can satisfactorily replace work by which a young person can earn a living. That is what young people want to do when they leave school—to earn money, to be independent, and not to be in receipt of State handouts.
I thank the House for the patient way in which it has listened to me this evening. This time last year, I was in a shipyard on Merseyside and I saw chalked on the wall the words "Cheer up, things could be worse." I did cheer up, Mr. Deputy Speaker, and things got very much worse. After a winter of discontent, we now have a new Government and a nation that has the opportunity for a new beginning. There is hope where previously there was gloom. There is a world recession and a shortage of energy. But we have an abundance of the finest resource of all—a patriotic and determined workpeople, waiting for resolute leadership and the opportunity to put their talents to work for the benefit of themselves, their families and the nation. That is why I believe that any regional policy, if it is to succeed, must be designed to release those talents. Nothing less will do.

6 p.m.

Mr. A. E. P. Duffy: It is a pleasure to follow the


hon. Member for Bristol, North-West (Mr. Colvin). I compliment him on his maiden speech, which, in its preliminaries, was humorous and generous. The House will have welcomed the hon. Gentleman's kind references to Ron Thomas and Martin McLaren. Both gentlemen are well remembered by their colleagues. If the present hon. Member for Bristol, North-West serves the House and his own party as actively and effectively as they both did, he will serve his constituency well.
The speech of the hon. Member for Bristol, North-West was lucid and informed and doubtless, like the speech of his hon. Friend the Member for Oxford (Mr. Patten), it will be seen as an important contribution to the debate. Both speeches, despite the closing passage of that by the hon. Member for Bristol, North-West, were suitably irreverent for maiden speeches—certainly for our taste. I know that they will both be read with great interest by the Secretary of State. Finally, the speech of the hon. Member for Bristol, North-West was fitting for a Member from a city that returned Edmund Burke.
Yorkshire Labour Members were quite clear in the early seventies that the problem with, and potential of, Yorkshire and Humberside could be summed up under three headings: low wages, environmental problems and geographical position. The root cause of the region's economic weakness was a lack of growth industry, aggravated by an outdated industrial structure. It was vitally necessary to bring to Yorkshire more growth industries, particularly those generating employment.
Whilst confidence in the basic industries of coal, steel and textiles remained, they needed to be reinforced by new industry if job opportunities were to be preserved. Such industry could be attracted to Yorkshire only if the environment was improved through tackling dereliction, and road communications were extended across the country to Hull.
The Conservative Government of that time believed that Yorkshire could sustain its level of economic activity without placing much reliance on mobile industries moving in from outside. I am glad to see that some of the Yorkshire group of Labour Members of Parliament are

here, because we all worked on a project that eventually led to a debate in this House, the first held on any region and one that gave rise to a three-line Whip of my own party. We look back on that debate as a milestone in the history of the House.
We were in no doubt at that time that the then Government's analysis was wrong in general. Regional economic policy must be based on the planned and induced relocation of industry. Nevertheless, those same Yorkshire Labour Members of Parliament recognised that the new Industry Act of 1972 might provide a framework within which self-help policies would receive the necessary Government support to arrest an ominous decline in industrial activity and job opportunity.
That some progress has been made can be seen from the latest figures for gross domestic product per head—the percentage change for 1976–77—that makes it possible to construct a growth league for Britain. The latest figures confirm that the Yorkshire region has continued its steady movement up the regional ladder since 1971. We know that we could have done better if certain parts of our region had been awarded justifiable development area status.
Labour Members of Parliament were repeatedly frustrated in their representations by a level of unemployment in Yorkshire that was misleading and appeared to compare less unfavourably with other assisted regions. What was never sufficiently appreciated was that Yorkshire's unemployment figures were determined less by frictional or deficient demand factors than by structural change in our basic industries. Moreover, the resultant unemployment level would have been much higher but for migration from the region.
There was a need for a new blend of job opportunities. There was a deficiency in white collar executive and administrative employment. That is why every Yorkshire Member of Parliament on the Opposition Benches attaches great importance to an affirmation by the Government—preferably this week—that the headquarters of the Manpower Services Commission will be relocated in South Yorkshire. South Yorkshire Members and the South Yorkshire county council,


though welcoming a recognition of the severity of the problems of the Mexborough/Goldthorpe and Rotherham areas through the granting of development area status, view the weakening of regional policy generally, and the treatment of the rest of South Yorkshire, with the gravest concern.
While Doncaster and Barnsley remain intermediate areas, the benefits of this have been much reduced. These areas still exhibit many of the classic symptoms of declining industrial and mining areas. Both areas suffer from an unduly high proportion of unemployment in coal mining, which is in serious decline in the Barnsley area. Unemployment is high in both areas. My right hon. Friend the Member for Doncaster (Mr. Walker) has asked me to remind the House that in Doncaster the level of unemployment is 7·7 per cent.—higher than in some proposed development areas. Indeed, the rate in Doncaster has frequently exceeded that in the adjacent area of Rotherham which is now proposed as a development area. I hope that my hon. Friend the Member for Rotherham (Mr. Crowther) will not object to my saying that.
Barnsley and the Don Valley also contain small areas with very high unemployment rates. One example is Wombwell, where 10·9 per cent. of the population is unemployed and the situation of which is identical to that of the adjacent Mexborough development area. Even more striking illustrations of local pockets of very high unemployment in the Yorkshire coalfield can be seen in areas such as Hemsworth and South Elmsall. My hon. Friend the Member for Hemsworth (Mr. Woodall) asked me to stress that, like Wombwell, these two parts of his constituency lack the capacity for self-generating growth.
The loss of intermediate area status for Sheffield means that, as well as losing its eligibility for a regional development grant from 1980, it would, from 1982, cease to be eligible for selective industrial assistance under section 7 of the Industry Act 1972, as well as European regional development fund grants. European Investment Bank loans, basic service grants under section 7 of the Local Employment Act 1972, Government advance factories, assistance under the employment

transfer and job search schemes and 100 per cent. derelict land clearance grants.
My right hon. Friend the Member for Sheffield, Park (Mr. Mulley), who is my neighbour, knows that we have problems. They are not just inner city problems. They are problems of intense dereliction and deprivation that we cannot imagine can be effectively tackled without the aid of some of the devices I have mentioned, all of which are to be scaled down and eventually removed from us.
Although it is true that Sheffield's unemployment rate has been slightly below the national average in recent years, it has masked structural decline and migration, as I indicated. Moreover, there has been a relative deterioration recently. There were almost 15,000 unemployed in the city last month. The chairman of the city's careers advisory committee wrote to me yesterday expressing concern at the seriously worsening employment position facing school leavers and other young people in the city.
I have already mentioned that the unemployment rate in Sheffield has been kept down by migration from the area. Projections suggest further losses of 15,000 people between 1976 and 1986. To the extent that greater employment losses have been averted by above-average industrial performance, prospects locally must be affected by the removal of assistance. For example, the local economy is disproportionately dependent on steel manufacturing. This industry is passing through a very difficult time. With private sector steel suffering from an average of 30 per cent. spare capacity, poor profitability, import penetration and a United Kingdom demand that is not likely to return to 1973 levels before 1985, rationalisation is inevitable.
This is a process that has cost 5,000 jobs over the past five years and the closure of Swift Levick's steel department only last year. A fierce takeover battle has just been concluded between Edgar Allen, Balfour and Aurora Holdings in my constituency, which the workers fear must result in more job loss. They fear that the Stock Exchange down here is about to fill the labour exchange up there. This takeover represents a significant step in the history of the city's special steel industry, with a major amalgamation in the bars sector. Other sectors—alloy


forgings, super alloy steels and low alloy billets—have been substantially reorganised, with Johnson Firth Brown, the country's biggest special steelmaker, playing a big part. Johnson Firth Brown took over part of Hatfields, another of our local firms, earlier this year, resulting in yet further job losses with more threatened.
The House appreciates that the Secretary of State has stayed throughout the debate so far, when there is a great temptation to leave, as so many of his predecessors have done, as I know only too well. I am grateful to the right hon. Gentleman for having sat through the debate thus far. I want to ask him whether he is really sure that this is an appropriate time to remove assisted area status from Sheffield. It is not only Sheffield that is seriously affected, for these sweeping Government changes in regional aid could plunge South Yorkshire into economic warfare. Sheffield will lose all aid. Rotherham and Mexborough will get more, and I am glad. Barnsley and Doncaster will retain some of the help that they already get. Therefore, by 1982, when Sheffield loses its intermediate area status, geography will be all important.
A factory coming to South Yorkshire can site itself in Sheffield and get nothing, or move a few miles up the motorway into the Barnsley area and get a chance of selective assistance under the Industry Act. Alternatively, it could move to Rotherham and Mexborough and qualify for cash grants towards the cost of the new factory and equipping that factory, as well as Industry Act aid. Both towns can also apply for the small firms employment subsidy until March 1980.
As the Secretary of State must know, employers, in time with the unions, are distinctly lukewarm towards his proposals. As my own local employers see it, the danger is that in the present economic recession aid will be cut before a reasonable level of profitability returns. If it is, trade, industry and employment prospects in South Yorkshire will be damaged.
The present structure for regional aid has given rise to many anomalies, as the Secretary of State reminded us. No hon. Member can deny that. The Secretary of State represents a Yorkshire constituency. He is therefore familiar with the problem of Yorkshire and Humberside. I appeal

to him to reconsider his proposals and to seek ways of tailoring them to the treatment that the area needs, which is more in keeping wih the problems from which it suffers. They are the problems of a region that the right hon. Gentleman knows only too well.

6.14 p.m.

Mr. Gerry Neale: I thank you, Mr. Deputy Speaker, for this chance of inflicting a third maiden speech on the House. I hope that I may also be forgiven for admitting how much I treasure this opportunity to make my first contribution to parliamentary debate. It is the consummation of many years' involvement in various activities that I have always believed could result in gaining election to this House.
In stating that I represent Cornwall, North, I am well aware that I am known immediately as the victor over John Pardoe rather than as Gerry Neale. My contribution to the debate on regional policy gives me an opportunity to show my respect for my predecessor, who represented the constituency for 13 years. It also allows me to express my own deep concern for the well-being of Cornwall.
John Pardoe championed the cause of Cornwall in a way that won him respect from even his political opponents. In his role as deputy leader of the Liberal Party, and in his spirited espousal of Liberal causes, he left none doubting his resources of energy and determination. Having campaigned against him twice in five years, and having disagreed with him fundamentally on certain issues, I could not bring myself to dislike him or disrespect him. He was as magnanimous in defeat in May of this year as he was considerate in his victory over me in October 1974. I wish to thank him for that, and on behalf of Cornwall, North I thank him for his service to the constituency since 1966. His defeat is undoubtedly a sad loss for the Liberal leader, for whom I feel a little sympathy but to whom I make no apology.
In the context of this debate, it is just as important for the Government to understand why, in my view, Cornwall, North now has a Conservative Member after 13 years of Liberal representation. Cornwall, North may be concerned about the standards of education, law and order and trade union power, but what has


increasingly dominated opinion in the constituency has been the economic performance of the country under the Labour Administration. Opposition centred on three aspects—on the level of personal taxation, the extent of Government expenditure and interference and on the level of unemployment. With that opposition came the realisation that the Liberal Party could do nothing to bring about the much-needed change in political direction and leadership. It was the sudden and unexpected support by the Liberal Party for the Labour Government in the spring of 1977 that in my view sounded the death knell for Liberalism in the constituency.
North Cornwall may have all the appearances of a relaxed area of scenic beauty, in which nearly every hon. Member at some time seems to have spent a holiday. But, despite appearances, it is made up of people who thirst after strong leadership and clearer direction. At the same time, they expect greater freedom for private enterprise. Without large-scale employers and excessive trade union representation, its economy depends on small businesses, be they farmers, hoteliers, small factories, shopkeepers, scientists or craftsmen. There is below-average pay and above-average unemployment, although there are shortages of labour in some skills.
For my part, I have known of, and become increasingly involved in, Cornwall's affairs over the past 15 years. I speak as a solicitor who started, and has been involved in, the current expansion of two businesses, one professional and one industrial. I have had the good fortune to have served on a planning committee for the new city of Milton Keynes—an area as different from North Cornwall as one could find. Compared with the wealth of experience in this House, I am aware of my own shortcomings. If I err into controversial areas, I hope that it is not judged as a discourtesy but more as a sincerity of view on this subject.
I am led to the conclusion that the Government, no matter how caring or spendthrift, can do very little to create industrial jobs in any real number. They are limited merely to saving jobs, all too often in industries that are no longer relevant to today's needs. Those jobs are allowed to linger on, soaking up the

energy that ought to be applied to encouraging alternative sources of employment. By the very nature of things, some large-scale industries become redundant and obsolete in that their products or services are no longer required by the market. It is rarely even practicable to plan for the immediate replacement of one large-scale employer by another. That is a painful political admission. To indulge in financial inducements to industry is to strike it with an economic flaw that politicians seem too ready to ignore. Governments can only designate development areas, assisted areas, intermediate areas, travel-to-work areas and any other form of area. They cannot make industries develop.
Any form of development area, so-called, in my view, first needs businesses willing to relocate to it, and it has to be remembered that there are many non-assisted areas in this country, with public projects such as new towns and private projects of industrial development, all competing to obtain these prospective employers for their area. What all these areas have discovered—assisted and non-assisted alike—is that there are all too few companies in total actually wishing to relocate; that these companies initially considered assisted and non-assisted areas irrespective of grants; and that these companies very often ignore the carrot of grants, plump for non-assisted areas and then become infuriated by development certificates bureaucracy.
But worst of all, as my hon. Friend the Member for Bristol, North-West (Mr. Colvin) indicated, is that the companies, by the very act of relocation and the installation of increased technology, actually need fewer employees to obtain a higher output.
A wise business judges the merits of any geographical location in terms of the viability of its investment and prospective trade. Can it really make sense, then, to offer financial inducements out of hard-earned taxpayers' money to encourage that business to throw its wisdom out of the window and go to an area which it has already dismissed? On the other hand, if a business can only find a viable future based on State grants and regional aid, can it be wise, on behalf of the taxpayer, in effect to invest in that company?
I cannot take as lenient a view as my right hon. Friend the Secretary of State.


In my view, industries, large and small, entrepreneurs and small business men, become established, they expand job opportunities, and they prosper, and they even fail, in spite of rather than as a result of Government grants and central Government and local government planning policies.
For those reasons, I welcome, though not with a full heart, the direction which is now being given to the regional industrial policy by the Secretary of State for Industry. If I were to criticise it, I would say that the cuts are not bold enough. In addition, I am suspicious of the fact that the machinery for regional aid is left intact. It may be thought that I would have been expected to welcome increased aid to Cornwall. I do not. This may surprise my West Country colleagues, but I cannot deceive myself into believing that it is Government aid which will reverse the tide on jobs in Cornwall.
I arrived in this House as concerned as anyone about the levels of unemployment. With that concern I carry a sense of frustration that jobs could so easily become available. To make them available, I believe that the Government must concentrate far less on policies of regional and industrial aid and much more on those relating to employment and planning law. To pursue regional inducements in Cornwall will serve only to distort the Cornish economy still further. But, worse than that, I feel that it will offer the very escape route which serves local planners most and local unemployment least. With grants available and industrial space and zones available, but no prospective tenants, those planners can then blame the short-sightedness of industrialists rather than their own.
Cornwall, like any other region, has to face its own set of economic facts of life. In the meantime, the Government must concentrate more on the continued reduction of bureaucracy surrounding employment and on the inhibiting provisions of the Employment Protection Acts. These hit small businesses. Their relaxation would clear a log-jam of available jobs in my constituency. The National Farmers Union states that there are many such potential jobs in agriculture.
On planning powers for local authorities, Government statements offer a far cheaper and healthier way than regional

aid for curing the worst effects of unemployment. The reduction of these powers would enable Cornwall's economy to flourish. The principal planning authority in North Cornwall has succeeded in each of the past three years in reducing the percentage of applications which it approves. It currently processes only one in five applications within an eight-week statutory time limit. But an industry exists which could in large part hold the key to Cornwall's economic future. Tourism offers immense prospects for the county on jobs, yet it is the planners, and not regional aid, that prevent their realisation. Many tourist ventures are able to sustain large staffs all through the winter, yet there are too many examples of applications being refused. No Government money is required, Private enterprise has it available and ready to invest.
In Newquay there are businesses wishing to expand on their own land and premises but they are refused consent. Yet at one and the same time factory space is being constructed by public money and remains vacant for much of its life. The previous Labour Administration distinguished themselves in North Cornwall by presiding over such expenditure, on the one hand, and by witnessing one person losing his job in the constituency for each single working day that they were in office, with another job even disappearing each weekend.
Surely there is a need not to ask whether the regional aid was enough but to ask whether it has any effect at all, because it is so insensitive to local resources and requirements.
The Conservative Party fought its election campaign on individual responsibility and the need to devolve power back to the individual from central Government as well as local government. I am able to stand in this Chamber because a substantial majority in North Cornwall shared that conviction. That majority want their parliamentary representative and their councillors—county and district—to face the fact that Cornwall wishes to do, and believes that it can do, much more for itself. It wants to be taxed less—and, mercifully, the present Government have done that. It wants to be governed less—and, thankfully, the present Government have promised that. But most of all it wants to be subsidised less. Subsidies do not give value for


money. They brand Cornwall as an area lacking in enterprise and lacking in local employment opportunities, and neither image is true.
North Cornwall is one of the most beautiful areas of Britain, and I am honoured to represent it. Of course, I do not wish to see it stripped of its charm and beauty. While I support the motion, I urge the Government to be more courageous, and to set a programme to phase out this smothering mantle of regionalism and trust the people. Let them challenge the local authorities to service enterprise in their areas rather than to restrict or contain it. Then stand back and watch Cornwall as an example.
The apparent need for subsidies would dissolve, unemployment would fall and the well-being of these so-called deprived areas would then become a matter of pride to those who live in them and represent them.

6.27 p.m.

Mr. Frederick Mulley: It is a great pleasure to congratulate the hon. Member for Cornwall, North (Mr. Neale) on his maiden speech. The hon. Members for Oxford (Mr. Patten) and Bristol, North-West (Mr. Colvin) are also to be congratulated on their maiden speeches.
I am sure that the House will have heard with great interest and sympathy the very generous remarks of the hon. Member for Cornwall, North about his predecessor, John Pardoe. It is not for me to get involved in the arguments that the hon. Member evidently had as to whether the Liberal Party should have supported the Labour Party, but I ask him to reflect on whether he would be so confident of his return here if an election were held now, less than three months after the recent campaign.
I do not feel in any sense that the hon. Member for Cornwall, North was in breach of the non-controversial rule, because it is quite proper that hon. Members should criticise their own Front Bench. I rather admired the hon. Member's courage in turning away possible financial assistance to his constituency, rather more, perhaps, than his political judgment in so doing. But that is a matter about which no doubt he will learn as time passes.
What worries me as much as the content of the regional policy before us is the way in which it has been presented. We had problems last week when the Secretary of State had to rely on his Under-Secretary to bring in copies of the written answer to a question in which the guts of the statement was contained. I was very surprised, on reading that, to find that it said that an explanatory note was available in the Library. I went to the Library. The staff there had no knowledge of any such explanatory note. It took several hours for them to procure one from the Department of Industry. To my great surprise, when one was procured, it was marked "Confidential" although its purpose was to explain the scheme and how to apply for grants.
I say that in a light-hearted manner, but it goes to the heart of the matter. The Department has not properly gone into detail in making these proposals. No one would question the passionate sincerity of the Secretary of State in pursuing the cause that he is espousing at the time but one can question his administrative competence. The presentation of the case is indicative of the way that the matter has been handled in the Department, which has not properly gone into the merits of the proposals before the House.
I wonder how long it will be before the Secretary of State changes his mind. As an honourable man, he may resign if he has to do the U-turn that was forced on one of his predecessors whose recent death we all greatly regret. We all remember the brave words of 1970 about lame ducks and the Industry Act that followed in 1972. We hope that such a U-turn will shortly come in the present Government's policy. If they believe that we need a revival of British industry, their economic policy is quite disastrous.
I read in The Daily Telegraph today that the Government are to cut defence expenditure. When I was Secretary of State for Defence, Conservative Members said that I should spend twice as much as I was spending, and when I hear of these cuts I wonder whether the Government have any grip on their manifesto policies or the nation's finances.
In order to be brief, I shall not enlarge on the broad perspective already covered


by my right hon. and hon. Friends but will mention briefly the way that these proposals will affect my constituency in the city of Sheffield. Under them we have lost our intermediate status. In his statement last week the Secretary of State said that we needed local initiative in all our cities and counties, so that is particularly ironic. I challenge any party in the country to produce a more active joint operation than that of the city council, the trade unions and chambers of commerce and trade in Sheffield. No one could have done more to promote employment by seeking job opportunities for Sheffield from all over the world. The reward for that enterprise is to lose our intermediate status.
Taking the crude figures, it seems that Sheffield has been harshly treated. The proper criteria for regional aid should be a projected structural change in the employment situation of a city, such as we suffer in Sheffield, with a decline in the manpower requirements of heavy engineering—steel and general metal industries—and where there is a substantial element of migration. Neither of these factors has been taken into account in the current proposals. From the example that I gave of the way that the Secretary of State's written answer was supplied to this House and the Library was given the explanatory memorandum, it is possible that some civil servants merely took a cursory look through crude statistics and decided that one part of the country should be upgraded and another should lose its status.
The published unemployment rates give an unfair picture of the state of affairs in Sheffield. The number of people unemployed in the Sheffield travel-to-work area was 14,788 in June. That area comprises 40 per cent. of South Yorkshire, yet parts of the region have been uprated, others have retained their intermediate status and other areas, principally Sheffield, have had that status taken away.
Relatively speaking, in Sheffield we have a greater problem in finding jobs. We have pockets of unemployment that are larger than Mexborough or Rotherham, whose status has been enhanced—not that I would wish them to lose that. In the inner city of Sheffield in six wards with a population of 100,000, which is

larger than the Dearne Valley area, there is an unemployment rate of 8·9 per cent. In a wider area of 10 wards there is still an unemployment rate of 7·9 per cent., which is equivalent to that in the Rotherham travel-to-work area, and Rotherham has been upgraded from intermediate to development area status.

Mr. Stan Crowther: My right hon. Friend is the second Member from Sheffield who has apparently exhibited a little green-eyed jealousy about the fact that Rotherham and Mexborough are keeping their assisted area status. Twenty-six thousand people travel every day from the borough of Rotherham to the city of Sheffield to work. Surely it will greatly assist the area as a whole if some of those people are able to stay in the Rotherham area to work. That would create more employment opportunities in Sheffield.

Mr. Mulley: I make it absolutely clear to my hon. Friend that in no way do I wish to see Mexborough and Rotherham lose their enhanced status, but it makes complete nonsense to pick out little areas in South Yorkshire when the whole region should be planned as an economic entity. Sheffield is the natural centre of South Yorkshire, and to deprive it of its status will not attract the industry that we need. It would be advantageous if the people from Rotherham who come to Sheffield to work did not do so and my constituents were able to take their jobs, and I should be happy to learn of any steps that my hon. Friend proposes to take to that end.
In Sheffield 15 per cent. of the population consists of retired people. That adds to costs that have to be met from local resources. Also of great concern is the fact that 3,700 school leavers are unlikely to find jobs. In view of the Manpower Services Commission's planned reduction, we shall have over 4,000 young people with poor prospects of obtaining employment. In theory we have a three-year transitional period, but in practice the assistance we have had from our intermediate status disappears. Very little can be done within a year, and it is unrealistic to imagine that a firm can come to the area and establish itself within that time. With the competitive grants available in other areas, we shall not be able to sustain our progress in bringing in new jobs to replace those lost


by recession and technological change in our metal industries.
While Sheffield has had intermediate area status, we have enjoyed about £10½ million of regional development grants for building purposes. A total of 33 firms have benefited and about one-half of the 70 firms that have come to local authority leased sites have had some aid from the fund. When trying to get a firm to move into an area, it is important to have available the selective assistance that covers removal costs and so on, and we calculate that about £8 million has come to the city in that way.
In theory, industrial development certificates will be freely available to non-assisted areas, but that will be a bar in practice, particularly to foreign firms, because they are rightly suspicious of the lengthy bureaucratic processes of Whitehall. We cannot give those firms the assurance that they will get a certificate. We could give that assurance if Sheffield were to remain an intermediate area.
In addition, the whole EEC regional programme is tied in with the fact that a project is receiving some aid from the national Government concerned. A number of schemes that would have qualified for European aid will not be able to receive it if Sheffield loses its status. It is impossible to quantify how much money may be involved, but I think that all hon. Members agree that we do not get a return from the EEC which compares with our contribution to Community funds. The fact that we are to be denied EEC aid for a number of social as well as economic and employment projects is probably as important as the fact that we shall lose grants from the Government.
There is an enormous backlog of derelict industrial land in Sheffield going right back to the Industrial Revolution. Sheffield has been trying, with some success, to clear up that land, but if we lose our intermediate area status we shall lose access to the grants under section 8 of the Local Employment Act 1972 which are made available for derelict industrial land clearance.
I am glad that the Under-Secretary who is responsible for small businesses is on the Government Front Bench, because

I am greatly concerned about the impact that Sheffield's loss of intermediate area status may have on small firms. I understand that a recent survey has suggested that Sheffield is second only to Birmingham in the number of small firms within its boundaries. If we lose assisted status, the small firms employment subsidy, which has been valuable to a number of firms in Sheffield, will also be lost because it is restricted to development and special development areas.
In assessing the impact of the proposals on my constituency, I must look wider than the immediate impact of the loss of grants for building and to the ancillary consequences, not least for small firms, and the loss of European regional aid.
The Secretary of State said that he would listen to evidence as to why some decisions should be reconsidered. I hope that the Minister who is to reply to the debate will make clear that there is the possibility of a review before the damage is done and that credit will be given to places such as Sheffield that have tried to help themselves—a philosophy which is surely not unwelcome to Conservatives. If the city of Sheffield makes a submission on those points, I hope that its case will be looked at again.

The Under-Secretary of State for Industry (Mr. David Mitchell): I can assure the right hon. Gentleman that if there are any special factors that we have not appreciated in drawing up the arrangements, we shall be happy to receive him, or a deputation from the city of Sheffield, in order to examine details that, it is felt, should be brought to our attention.

Mr. Mulley: I am grateful to the Minister, who is, as always, extremely courteous. I shall seek advice and I think that we may wish to take advantage of his offer. One has the impression that the package has been put together with the same level of skill as that with which it was presented to the House, which, everyone agrees, was less than the desirable standard.

6.46 p.m.

Mr. Kenneth Carlisle: There is no doubt in my mind that the time has arrived to subject regional policy to a rigorous scrutiny. After all, the purpose of the aid is to be selective and


to pick out those areas of the country that are genuinely in need of help. Now that about 40 per cent. of Britain is covered by selective assistance, what was meant to be selective has become common-place. In the words of Gilbert,
When everyone is somebodee, then no one's anybody.
The existing schemes have become riddled with anomalies and absurdities. Perhaps that can best be shown by a practical example. My constituency is not an assisted area, but is surrounded on three sides by intermediate areas—Horncastle, Louth and Gainsborough. The current level of unemployment in Horn-castle is 5·3 per cent., at Louth it is 5·4 per cent., but in Lincoln it is 7·2 per cent.—way above the East Midlands average of about 5 per cent. Our unemployment is exceeded only by that of Gainsborough. Even Grimsby, which is a development area and not an intermediate area, has an unemployment rate of only 6 per cent.
Despite its higher unemployment, Lincoln is not assisted. Because of that fact, industries have been discouraged from coming to the city. We have suffered under the shadow cast by the surrounding intermediate areas. Until May, the only course open to us was to apply for intermediate status. The city council and industry in the city urged me to do so, and I did so. Had Labour won the election, I would have continued to fight for intermediate status for Lincoln. Why should Lincoln suffer unfair competition in the drive for new jobs?
If Lincoln had won intermediate status, who would have doubted that in a matter of months Sleaford to the south would have applied for similar status, and then Stamford further to the south and then Peterborough? Where would the movement south have stopped? It would have been just like the advance of the last ice age which reached its climax 12,000 years ago when all but the very South of Britain was covered by ice. Even the South was a barren tundra inhabited only by mosquitoes and gnats.
Fortunately, the advancing tide of assisted areas has been reversed and the anomaly of Lincoln and other such places has been relieved. I believe that such a reversal will not cost jobs. It will certainly save money.
The assisted areas have been reduced to about 25 per cent. of the area of the country. Those parts with harsh unemployment problems, such as Merseyside and Clydeside, have been made that much more attractive, relatively, to new jobs. Surely, if we are to have selective assistance, such a move is sensible. It must be right to give help to those areas in greatest need and to keep it to them.
The areas of the country that have lost their assisted area status this time have two years to adapt to the change in status. I am glad that section 8 of the 1972 Act has been made available to attract international projects and companies to the United Kingdom.
Altogether, the reforms are far from being dogmatic. They are pragmatic and sensible. For parts of the country such as Lincolnshire they are a boon. I recommend the review and its pragmatic results to the House.

6.50 p.m.

Mr. Donald Stewart: I apologise to the House for my unavoidable absence during the opening part of the speech by the Secretary of State for Industry.
I associate myself with the tributes that have been paid to the maiden speakers, the hon. Members for Cornwall, North (Mr. Neale), for Bristol, North-West (Mr. Colvin) and for Oxford (Mr. Patten). They put their arguments forward with considerable fluency and I was surprised at their self-restraint in postponing their maiden speeches until today.
I take issue with the view of the hon. Member for Oxford that regional policy has failed. All hon. Members should consider what the state of the United Kingdom would have been today if those policies had not been tried. The policies were devised to prevent the concentration of industry in one small sector of the United Kingdom—the South-East corner of England. They gave the right to all areas to share in the prosperity of the country.
The Secretary of State for Industry has dished out impressive medicine during the last two weeks. Considering what he told us last week, it is surprising that he did not tiptoe into the Chamber, drop the statement on the Table and make for the hills. However, he had to come to the


Chamber and make his speech to the House, and we heard something about that matter yesterday.
The last Administration took away the regional employment premium, and that resulted in a severe loss of jobs to Scotland. Therefore, both Labour and Conservative Governments are responsible for the increase in unemployment in Scotland. The alteration in the status of development areas must be an unpleasant surprise for hon. Members from areas such as Aberdeen and Edinburgh, particularly the new Conservative Members. I am sure that their voters would not have supported that move. However, if that is the kind of government that they wanted, it is certainly the kind of government that they are getting.
I believe that there should be an increase in the funds for the Scottish Development Agency and a change in the way in which the agency is permitted or not permitted to make its decisions. We lost the Mostek development to the Republic of Ireland which represents 1,000 jobs in a few years' time. An article in the Electronics Times states that the Scottish Development Agency is
more than a little angry … not with the success of its Irish counterpart but with the Department of Industry. … The Irish Development Authority had one advantage that must have been very important. They have, as we do not, the authority to act as a single agent and the right to make decisions for industrial investment.
Assistance is vital for the declining industrial sectors. Within the last few days there has been notification of the measures that will affect these areas—the shipyards, the steelworks and so on. Something must be done about the inevitable unemployment that will follow the implementing of these measures. They come at the worst possible moment, tied up with the worldwide recession. The Government could not have acted in a more irresponsible way.
I hope that when the Secretary of State for Scotland replies, he will be able to tell us the effect that will be felt upon the Highlands and Islands Development Board. I hope that he will also refer to the regional aid that the EEC councillors have proposed in my constituency. That aid is dependent upon a sum of money coming from the Treasury. Many people in Scotland, not only in my party, believe

that funds allocated by the EEC have been pocketed by the Treasury and deducted from funds that would have gone to the areas.
The Conservatives are taking a panic-stricken approach to these aids, Civil Service jobs and so on. Within the next few weeks it will be realised that the Conservatives are engaged on the destruction of these jobs in Scotland. The status of the development areas must be reinstated and each area should be allowed the chance to survive. In the devolution debates it was charged against my party that we were aiming for the break-up of the United Kingdom. This Government are now dividing the United Kingdom into two nations in a way unknown since Disraeli made that remark.
The Opposition amendment that refers to the "reactionary policies" of the Government is entirely accurate, and my hon. Friends and I will support it tonight.

6.56 p.m.

Mrs. Elaine Kellett-Bowman: I congratulate my hon. Friends the Members for Bristol, North-West (Mr. Colvin), Cornwall, North (Mr. Neale) and Oxford (Mr. Patten) on their excellent maiden speeches.
One of the great weaknesses in regional policy in the past has been the appalling waste of public money that poured funds into politically sensitive areas which could not, on any objective criteria, be said to need it. Alternatively, money was given for projects in needy areas which would have gone there in any event. I am glad that my right hon. Friend's proposals will prevent either of those alternatives from taking place in the future.
The proper function of regional policy should be to encourage the creation of permanent productive jobs in depressed rather than affluent areas. The Secretary of State's intention to provide the funds only if without them the project would not go ahead in an assisted area makes sound common sense. However, I feel that he may need the assistance of a lie detector to be certain of achieving that.
The money that is saved can be used where it will really help to provide more jobs. On behalf of the citizens of Lancaster, I thank my right hon. Friend for listening to our pleas and removing the bias against us that has prevented us for


years from overcoming the scourge of unemployment. It is the first time that we have had the occasion to thank a Minister from the Department of Industry since the days of my hon. Friend the Member for Harrow, Central (Mr. Grant), who gave us our intermediate area status. He took the trouble to come and see our difficulties for himself.
In a Government survey of two years ago, North Lancashire, Morecambe and Lancaster, was described as
relatively isolated with a small and vulnerable employment base and high unemployment".
Unfortunately, the description was only too accurate. However, the Socialist Government did nothing about that and any successes that we have achieved in keeping the rate in Lancaster down below the present abysmal total are a result of local council initiative and superb co-operation within industry. The first almost fatal blow to our industrial prospects for jobs came in 1968. The Labour Government's regional policy at that time left us out of account. Our main employer, Nairn Williamson, took a large part of its work force to Scotland, where massive grants were available.
From that time on, blow succeeded blow. The Post Office savings bank was transferred to Durham with the loss of 290 jobs and British Rail Carnforth cut its work force by 70 per cent. In 1952, ICI employed 2,000 people. That figure has now been reduced by 75 per cent. The Shell refinery closed down and in the years up to 1976 500 shore-based and 250 sea-going jobs were lost by British Rail at Heysham. We have indeed endured industrial death by a thousand cuts.
Despite a strongly argued case, backed by solid evidence, that was put forward to various Ministers, no help was provided. The only help that was provided came from our status as an intermediate area, but that was gradually whittled away by the increasing aid that was given to development and special development areas. Now for the first time we shall be on level pegging with the areas around us.
I wish to refer to the tremendous amount of help which has been given to this country by the regional fund of the EEC and to us in Lancaster and Morecambe in particular where the European regional committee came to see our prob-

lems for itself. This country has complained for a long time that the EEC budget is out of balance and that too much money goes to agriculture. If we can tilt the balance the other way so that less goes to agriculture and more to regional development, I believe that we shall do a great service to our country.
Many people, when they consider aid from the regional fund, think of it only in terms of the inner city areas. But there are many areas in the uplands, such as Cumbria and Lancashire, which are becoming almost fossilised. Sometimes we tend to overlook the seriousness of the problems produced by an ageing population and population drift. I do not wish to see these areas becoming dead parts of our nation or regarded as antiquated museums. The Cumbrian NFU has brought forward a most imaginative and useful scheme, the "East Fellside Project", to try to assess the potential of the hills and uplands and to develop this potential and keep them as vital living communities. This is the kind of scheme for which the regional and social funds and the guidance fund of the EEC could be made available. But they are eligible for such help only if the area concerned maintains some form of assisted area status or if the regional fund regulations are changed, as they must be changed in 18 months, to allow for this factor.
There are schemes in other parts of the intermediate areas which would also suffer if this umbrella status were removed from them. Some time ago the delegation from the regional policy committee of the EEC was kind enough to visit the intermediate area of Lancashire and a visit was made to an area containing a vast old colliery site of 91 acres known as the Rowley tip. That site at present is an eyesore, but it has now been proposed by the Lancashire county council for a complete transformation. It is to be used as a regional gathering ground for the processing of industrial waste. In addition, the scheme provides for a lovely lake and recreation area, which will be of great benefit to the surrounding district. This is an imaginative project, but it will not be eligible for regional fund aid unless the area retains some form of assisted area status or unless the regulations are amended in


order to take advantage of regional fund aid for such schemes.
I beg my right hon. Friend the Secretary of State for Industry to keep this point very much in mind so that we shall not lose the benefits which we can obtain from the EEC if we play our cards right.

7.3 p.m.

Mr. Cyril Smith: I, too, wish to congratulate the hon. Members for Oxford (Mr. Patten), Bristol, North-West (Mr. Colvin) and Cornwall, North (Mr. Neale). We have seen a great change in the representation of Cornwall, North when we remember the speeches of the former Member and compare it with the speech we heard today from its new representative. However, that is a matter for the electors of Cornwall, North to decide. Certainly we would have had a very different speech this afternoon if it had been delivered by the previous representative of that constituency. He would have argued for more help for his area rather than less help, which was the case put forward by the present incumbent. However, I hope that we shall have many contributions from the constituency's new representative, even if only for the lifetime of this Parliament.
There are one or two matters which require clarification from the Minister this evening. I am glad to see the Secretary of State for Industry in the Chamber to hear me put these points. The Secretary of State for Industry, in answer to an intervention, mentioned the case of a company in an area which is to lose its status. I understand that such a company will not receive Government financial assistance for a project if that project is not completed by an agreed date in 1980. In other words, the Government do not intend to honour their financial commitment. I hope that this point can be elucidated in the Minister's reply.
I have received a letter from the North-West Industrial Development Association expressing concern on this point. The letter makes the point that certain companies are already committed to expenditure on projects for which grant applications have already been made and approved. However, grant will not be paid if projects are not completed by 1 August 1980. The letter makes

clear that this could well affect certain factory building projects.
If the Government take the view that even though companies have been promised grants they will not receive them if the projects are not completed by the due date, I hope that they will think again. If this is their view, the Government are, in effect, introducing restrospective legislation. We all know that it takes 12 months or more to build a factory and to equip it. If a company has set out on a project believing that it will receive grant, it is most unfair if it suddenly discovers that a proportion of money promised when the scheme was capitalised will not now be made available. I hope that the Government will reconsider the implications of their decision.
There are one or two other matters which require clarification. The hon. Member for Lancaster (Mrs. Kellet-Bowman) has cleared the first item relating to EEC grants. I hope that the Government will assure the House in the reply to this debate that when the Minister meets his ministerial colleagues in the EEC he will press for changes in EEC legislation to enable the EEC to give assistance to areas even though they do not enjoy assisted area status. I accept that, as things now stand, such assistance may not be available, but I hope the Minister will assure the House that the Government will press for changes in EEC legislation at the appropriate time.
I should like to ask whether grants under the regulations on tourism will be made available in non-assisted areas and whether the 100 per cent. dereliction grant will continue to be made available to local authorities in such areas. Those are my queries, and I hope that the Minister will answer them.
I wish to refer to a recent written answer which makes clear that intermediate area grants will be stopped by use of ministerial discretion. I understand that eventually legislation will be enacted to vary the provisions of the Industry Act. I hope that the Minister in his reply will clarify the use of ministerial discretion.
Over the past few days we have had all sorts of Government announcements affecting industry. I remember that at one stage in my short political career I was accused of behaving like a bull in a


china shop. I must say that the Government's actions over the past few days affecting industry and the encouragement of industry have led me to the conclusion that the present Secretary of State has a tendency to behave in exactly the same way.
The Government's action surprises me. As I have interpreted the scenario painted by the Government, certainly in terms of employment, in which I also have an interest, the policy appears to be to withdraw money from public expenditure, which means that, temporarily, there will be an increase in unemployment when people are declared redundant as a consequence and, ultimately, those people will be taken up by private industry because that is where the growth is to come. That, as I understand it, is to be the scenario over the next two or three years. In other words, we have to be patient and we have to understand that inflation will rise again temporarily and that there will be an increase in unemployment but that all this will be taken care of once the economy turns round and private industry begins to grow.
Bearing that in mind, the Government's attitude towards private industry seems very strange. It is incompatible with the desire to see the growth of private industry to withdraw from the financial encouragement to private industry more than £230 million which previously was used from Government sources to encourage it.
There are many areas in the North of England, from where I am proud to come, which are deeply concerned about and distressed by the Government's treatment of them, bearing in mind the policy which is to be adopted. I do not want to argue a constituency matter at any great length, but even my own constituency of Rochdale is no longer to have assisted area status. What none of us is sure about is exactly the criterion which was used in deciding which areas should have assisted area status and which should not. Was the criterion merely the level of unemployment, the future prospects of unemployment, the ability of the area to attract industry, the desirability of attracting industry to an area or the depopulation of areas? What was the criterion which decided which areas were to have assisted area status and which were not?
Rochdale is a constituency which until a few years ago relied for as much as 60 per cent. of its employment on the textile industry. We have seen the industry almost bleed to death over the past few years under successive Governments. I make no party political point when I say that. The textile industry has gone down and down, and places such as Rochdale have had to fight very hard to try to attract new industry to replace the textile industry.
But the story does not stop there. Even now a proportion of our textile industry in Rochdale is involved in such activities as the manufacture of fabrics for the tyre industry. We all know that the importing of tyres for cars and lorries is on the increase. We are importing more cars, and they come in with tyres on them which, obviously, are foreign made. What is more, anyone who has a foreign car tends to buy a foreign tyre to replace one which has worn. There is a considerable increase in imported tyres, and that trade, too, is likely to affect the level of employment in my constituency.
The conservation of energy may not be thought to have any connection with employment, but it has in Rochdale. It is now established that my part of the world, including Rochdale and Heywood and Royton, is very much in the centre of the country in terms of distribution. That is why we have been able to attract firms such as Woolworth and many other similar companies which use our area as the centre of distribution for their goods. It is in the centre of a motorway complex, with connections to various parts of the country. If we want to encourage a decrease in the volume of petrol used, we have to attract industries, especially distribution industries, to the centre of the country in order to distribute their goods. I suggest that that is another reason why we should be encouraging industry to come to places such as Rochdale.
I return to what I said earlier about my constituency. What was the criterion used by the Government? How have they decided that one area should have assisted status and another should not? I hope that we shall get some indication from the Government about what has been their policy and, what is more important, what is to be their policy in determining which areas have assisted status and which do not.

Mr. Dan Jones: Is the hon. Gentleman aware of any commission of any kind attached to the Department ever visiting Rochdale to establish the facts so as to be able to advise the Secretary of State? If he is, the hon. Gentleman is very fortunate, because no such research has been carried out in my own constituency.

Mr. Smith: The hon. Gentleman's experience is the same as my own. Tories do not come to Rochdale. There are no Tories in Rochdale for them to visit. To be fair, I would not have expected such a visit to every area involved. But certainly Rochdale has had no visit from a Minister. It might have been better if such a visit had taken place.
In my view, regional grants help industry and attract it. For many years before coming to this House, I was chairman of a committee in my constituency which was concerned to attract industry to the area. I know from experience that the existence of grants in one area as opposed to another has an effect in determining where a company places its business. Therefore, I believe that it is wrong to reverse the regional aid being given by the Government, and it is a reversal if a Government reduce the amount of help available by more than £230 million.
It is likely that the companies affected by this change of policy will be new companies and small companies. When he was in Opposition, the Under-Secretary of State was given the special responsibility of speaking on behalf of small businesses. What is more, I remember how, during the general election or shortly before it, the Secretary of State appeared on television and received a tremendous ovation from a meeting of the self-employed or the proprietors of small businesses somewhere in the South of England. His party declared its aim of assisting small businesses. The Government appear to be assisting them by withdrawing from them £230 million of aid which they received from the previous Administration. That seems to be a very strange way of assisting small companies.
What is more, it is often the small companies which have occupied industrial units. Today, we hear that those units are to be reduced in number and transferred to local authorities. Local authorities have not enough money to do the job which they are trying to do at the

moment because of the Government's policy of taking money away from them. In other words, the Government are taking money away from local authorities and saying at the same time that if they want advance factories they must build them. I suspect that the net result will be that they are not built.
These small factory units have encouraged and helped many small businesses to be started in the past 15 years. If this policy attracts any section of industry more than another, it is the small business. For that reason if for no other, the Government's policy must be opposed.
Even if it were correct to withdraw help to industry to get it going, to start it and to attract it to various areas, surely the policy is ill-timed. Industry is facing very high interest rates. Earlier today the Prime Minister refused to give the Leader of the Opposition any indication of an easement in interest rates. She refused even to indicate that she would not continue them for any longer period than the right hon. Gentleman's own Government did.
At a time of high interest rates, everything is moving against industry investing in new plant and machinery and in building. The cost of borrowing money is astronomic. But this is the very moment at which the Government decide to announce that they intend to reduce grants to small businesses by £230 million. One can argue that this is not a matter of aid but a question of regional policy. It may be regional policy. But, in the end, it boils down to the fact that industry will receive £230 million less aid a year under this policy than it received under previous policies. For that reason, my colleagues and I will go into the Lobby with the official Opposition.

7.21 p.m.

Mr. Iain Sproat: Before giving my own view on the changes in regional policy announced recently by my right hon. Friend the Secretary of State for Industry, which he has expanded and clarified today, I should like to comment on the speech of the right hon. Member for Western Isles (Mr. Stewart), who has now left the Chamber, although no doubt temporarily. His speech was uncharacteristically ungenerous and carping. It was more typical of the whining note we were accustomed to hearing from


Scottish National Party Members in the last Parliament.
The right hon. Gentleman made no mention whatever of the striking tribute to the success of our regional policy, including some of the regional policies of the last Government, shown by the fact that another 1,300 jobs, we read today, are to be located at the semiconductor plant at Greenock. This must be one of the biggest boosts to Scottish employment, tragic though the jobless figures are, for a long time. In one sense, all the criticisms that my right hon. Friend the Secretary of State for Scotland had to take over the new regional policies have been wiped aside by the fact that 1,300 new jobs are to be located in Scotland under the new conditions. We have the proof of the pudding this very day.

Mr. Robert Hughes: The hon. Gentleman might contrast with those new jobs the singular failure to persuade the Government to bring Civil Service jobs to Scotland. I gather that 6,000 were due to move, but only 600 are actually coming.

Mr. Sproat: The hon. Gentleman must wait and see what we get. Under the last Government, we were promised that a lot of civil servants would be dispersed under the Hardman report but none came. If the figure is only 600 under this Government, it will at least be 600 more than under the Labour Government. I shall be grateful for that.
I want to direct my relatively brief remarks first to the way that the changes in regional policy affect Scotland in general and then to deal with the situation in Aberdeen. I strongly welcome the overall package that my right hon. Friend has presented to the House. The old system had to go. My right hon. Friend was right to change a system under which we had laboured for too long in Scotland. The system was not fair and it was not working.
Examples have been given, mainly from the Labour Benches, of the unfairness of the old system. We were told that Rotherham was getting something but not Doncaster, that Sheffield was getting something but not Mexborough. An example of the ridiculous unfairness of the system, as it affected the region that I represent and the wider oil-related

region, is the fact that oil companies were getting Government grants for locating themselves in places where they would have gone without the giving of any grant. The oil companies, which did not need the money, were benefiting whereas other traditional companies in my constituency, for example, the fishing industry, were not getting the help that many of us would have liked to see.
There can be no argument: the old system was not fair. Also the old system was not working. One cannot say that any system was working sensibly when there was a doubling of unemployment in the country, as happened in Scotland. No one can defend the old system as being other than unfair and ineffective.
Another reason why I welcome the overall package that my right hon. Friend has presented to the House is that it concentrates the greatest aid on the worst hit parts of Scotland. I can say this in a spirit of political altruism. My constituency is not included, but the West of Scotland, which needs the help most, will get it. We heard a statement yesterday by my hon. Friend the Minister of State, Department of Industry on the future of the shipbuilding industry. We recognise, with sadness but realism, that contraction of the industry had to come and that such contraction will hit the West of Scotland. It is therefore appropriate that aid should be concentrated on an area that will be fairly swiftly hit by contraction.
Scotland now gets a higher percentage of development grants than it got under the Labour Government. While that is welcome in percentage terms, it is well to realise, particularly as far as the West of Scotland is concerned, that it is not just a question of a higher percentage. In actual cash terms, the worst hit areas of the West of Scotland will get more money. I understand that the increase is likely to be from £70 million to £90 million a year. I hope that all those political people in Scotland who, according to one Scottish newspaper, reacted with fury to the proposals of my right hon. Friend will think again when they realise that more money, not just a higher percentage for Scotland as a whole, will be directed to the worst hit area of the West of Scotland.

Mr. Dan Jones: The hon. Gentleman is very lucky.

Mr. Sproat: I am glad that the hon. Gentleman recognises the benefits that my right hon. Friend is conferring on Scotland. It is always pleasant to have those benefits recognised by the Opposition. I hope that the same sentiments will be expressed from the Opposition Front Bench in the winding-up speech tonight. I look forward to that speech, but I am astonished that the Shadow Secretary of State for Scotland, after all the so-called fury that was supposed to exist in Scotland, is not speaking for the Opposition. My right hon. Friend the Secretary of State for Scotland is winding up for the Government. The Opposition clearly realise that the package that the Conservative Government are putting forward is better for Scotland than the position that existed under the last Labour Government.
We are glad that my right hon. Friend is to phase in these changes with relative slowness. We all remember the all-too-brief notice of the withdrawal of the regional employment premium, a sum about equal to that now being cut by my right hon. Friend. At least, we are to have a period of phasing in. Every business man in Scotland trying to plan for the future will be glad to see that practical change of attitude.
I have explained why I welcome the package which my right hon. Friend has presented. I shall now be more specific about Aberdeen. Aberdeen is my constituency. I mention it not because of that but because it illustrates a general principle of which I hope to convincè my right hon. Friend.
I can understand why he suggests that the Aberdeen travel-to-work area should be demoted and should cease to be an intermediate area in three years' time. I do not agree with his suggestion. I do not know why the hon. Member for Aberdeen, North (Mr. Hughes) laughs. He may find that we are successful in persuading the Secretary of State for Industry and the Secretary of State for Scotland. We have three years in which to make our persuasive arguments before the axe can fall.
I can see that the Government have taken into account our low rate of unemployment. It now stands at about 3·3 per cent., which is less than half what it is for Scotland as a whole. The glossy veneer of prosperity which North Sea oil

has provided creates the aura of a boom city. That impression does not tell the whole truth. Beneath that glossy veneer are other aspects which are not as rosy and glossy as in the oil-related industries.
I tried to persuade the Labour Government. I took delegations to meet them and tabled questions. I tried to put the truth before them. I tried to convince them that employment statistics are too blunt an instrument by themselves to judge exactly the prosperity of an area. They did not accept my argument. They did not accept that the statistics masked the true position in Aberdeen.
I am pleased that the Secretary of State for Scotland has recognised that statistics which show that unemployment is low in Aberdeen do not reveal the whole truth. That is why my right hon. Friend has set up a committee to review the impact of oil on the North-East of Scotland. That shows that the Government are determined to look beneath the surface.
If the Government did not do that, I should fear a major recession in the North-East of Scotland in the next 10 to 15 years. I fear that there will be a major recession unless the Government, before the status of Aberdeen is changed, take long-term economic steps to maintain and, if necessary, restore the area's economic strength.

Mr. Dan Jones: Does the hon. Member agree that his argument about unemployment statistics applies equally to other parts of the country?

Mr. Sproat: I agree. I was going to deal with that.
I fear that Aberdeen will change from a boom city to a ghost city within the next 15 years. We must avoid that. Traditionally, the indigenous industries of Aberdeen have one disadvantage and one advantage. The disadvantage is the geography of the city. Aberdeen is a long way from the main consumer centres. The industrial competitive advantage of Aberdeen is that wage rates are lower than the national average. That may not be an advantage to the individuals receiving wages, but it is an advantage in terms of selling goods.
Before oil came to Aberdeen, wage rates were about 10 per cent. below the national average. Since the development


of North Sea oil, the traditional industries have retained the disadvantage of distance from the main consumer centres, but the oil industry wage rates have pushed up the rates in traditional industries. The wage rates in Aberdeen are now between 10 per cent. and 15 per cent. above the national average. Overall, oil has indeed been a boon to Aberdeen—but it has not been a boon and a blessing for the traditional industries. It could prove to be a disaster for Aberdeen unless the Secretaries of State for Industry and Scotland examine the long-term implications of North Sea oil.
I hope that the promised oil review will turn up the evidence to prove that Aberdeen should not lose its status at the end of three years. That is what I shall seek to prove. I do not know why Opposition Members laugh. They should hang their heads in shame because they did nothing. They would not even set up a review.

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): Where are all the Scottish Opposition Members?

Mr. Sproat: I also wonder where they are and why they are not attending this vital debate.

Mr. Robert Hughes: Will the hon. Member give way?

Mr. Sproat: I have already given way. I am just concluding my speech.
I want to see Aberdeen thrive because it is my constituency. However, it is not a question of that alone. Aberdeen is a typical example of a general situation. I seek to persuade the House of a general principle in relation not only to the subject of today's debate but to the dispersal of civil servants. It is essential for the social and economic health of our country that prosperity and job opportunity be spread as widely as possible. That is why it is essential to keep the prosperity which North Sea oil has brought to Aberdeen after the oil has run out.
I dislike any socially unhealthy concentration of prosperity or economic opportunity in the South of England or anywhere else. Prosperity should be spread as widely as possible. That is why I shall fight on this issue and why I am fighting on the Civil Service job dispersal issue. It is why I welcome the bold

beginning which the Government have made to provide us with a strong regional policy.

7.39 p.m.

Mr. Alan Williams: I apologise to my hon. Friends for intruding in this debate. I was the Minister responsible for regional policy in the past three years and the Minister who, in 1967, took through ministerial committee the proposition to establish the SDAs, many of which have been downgraded. In 1969, with my right hon. Friend the Secretary of State for Economic Affairs, I set up the Hunt committee to look into the problems of the grey areas which, in Lancashire and Yorkshire, were condemned to becoming grey yet again because of Tory Party decisions. It is, therefore, appropriate for me to comment. I shall try not to speak for too long.
After three years of listening to the Secretary of State agonising on the Opposition Benches about the merits and demerits of selective aid and non-selective aid, it is fascinating to see the typically and uniquely logical solution he seems to have arrived at. He has come to the conclusion that regional development grants are not good because they are not selective, and he has equally reached the conclusion that section 7 and section 8 grants are not good because they are selective. It seems to me that the absurdities that we heard from him when in Opposition have now been tragically turned into policies for which many areas of this country will suffer in the next few years.
The right hon. Gentleman dismissed previous regional policy against the criterion of net job creation. That never has been a criterion against which regional policy has been determined. In his opening speech today he said that regional policy is especially about the transference of jobs, about the movement of job opportunity, about the diversification of industry in the traditional areas.
Indeed, in a time of recession, it would have been astonishing if regional policy had been able to pass the net job creation criterion or yardstick that the right hon. Gentleman set out. In a time of recession, regional policy is defensive. It is about keeping as many as possible of the jobs that one has and, if possible, if there is mobile industry, securing a reasonable


share of that industry. That is something that the right hon. Gentleman overlooked with his criterion.
Over a 10-year period 400,000 jobs were lost in Wales, the North of England and Scotland in three industries alone—in coal, steel and shipbuilding. So let no one listen to this nonsense of net job creation. It is an irrelevancy to justify an axe decision that the right hon. Gentleman has taken.
Regional policy has never been about employment alone. It is about social factors as well. We inherit a population pattern which reflects the energy availability and energy resources of the nineteenth century, but in that population pattern we have the cumulative social capital—our schools, universities and hospitals—and it is an absurdity to think in terms of allowing a drift away from traditional areas of employment, a drift down to London and the South, forced there because that will be the only place where jobs will be available but where the existing social capital is already under congestion. The roads are congested, there is excessive utilisation of school facilities, hospitals and so on.
Let us not assume that regional policy is only in the interests of Wales, the North, Lancashire and the other assisted areas. It is essentially also in the interests of the prosperous areas of this country.
Last week's announcement was not the only attack that has been made upon the assisted areas. It follows others. It follows the cuts in finance for the Scottish Development Agency and the Welsh Development Agency and the abandonment of the office development permit system. Fascinatingly, it should also have followed the announcement of Government policy on dispersal of Government jobs. I wonder what innocent motive the Government have for failing to issue a statement today, before this debate, on what they intend to do about the dispersal policies that were announced by the previous Administration. They did not care to come to the House after such an announcement and hold this debate today.
In addition, we have had a major change in the industrial development certificate system, and we must not underestimate the significance of that change. It is massive in its impact. It means that

in future only the largest projects need be vulnerable to regional policy, because, with a 50,000 sq ft initial factory that can employ between 200 and 300 people, an automatic second phase is granted, with another 200 to 300 people employed. Then there is a rooted, large factory. It is well within the wit of most business men to so phase their development that if they might exceed the 50,000 sq ft—other than in very extreme cases—they will ensure that they build in two phases and so escape the regional net.
We shall see an even lower share of mobile industry coming to the assisted areas. This is where these proposals represent a major and massive swing in favour of the South of England and the Midlands. Only yesterday, in The Guardian, one of the right hon. Gentleman's hon. Friends, the Member for Chippenham (Mr. Needham), said:
In some parts of the country, particularly in the south, the pressure on wages will come not only from union claims but from real shortages of labour of all types.
In his opening speech today, the Secretary of State referred to the shortages of labour that are already appearing in the South and the Midlands. Yet at this very time the Government increase fourfold the size of factories that can be built without any control by the Government at all. Clearly, they believe that they can leave it to market forces. But they left it to market forces in the 1950s. My maiden debate as a Minister in 1967 was on regional policy, when my hon. Friend the Member for Ealing, Southall (Mr. Bidwell) pointed out that at that time in London there were 11 vacancies for every unemployed person on the register. That was the result of leaving it to market forces. Everyone leaves it to someone else to carry out regional policy.
Let no one think that regional policy can be left to the local authorities, as the CBI suggests, on the ground that local authorities are already involved in planning. Some officials not very far from where I am standing at this moment will recollect that last year there was an occasion when a certain local authority came to see me and said that it hoped that I would be sympathetic to a project for a smelter that it would be putting forward in the near future. It was to be inland, in a densely populated area. When I asked what sort of smelter, I was told


that it would be a lead smelter. I pointed out that not many people liked lead smelters and asked "Do you think you will get it through in your area and have the approval of your constituents?" Back came the reply "Do not worry. The winds are westerly, we will bung the site on the extreme east of our area, and all the pollution will go into the next local authority area." That is an absolutely true story. That is the sort of logic of the obsession with getting rateable value. We cannot expect regional policy to be administered by local authorities. It is not their job to do it.
Now, as a result of the changes in the industrial development certificate policy, there is a danger of regional policy being substantially eroded. At this time, surely, the logic is that the loss of the stick should be counterbalanced by increasing the persuasive value of incentives. Yet, again, the opposite has been done. At the very time when it will cost more to persuade a business man to leave the comfort and security of the South, the regional development grant is to be removed from intermediate areas and cut in the development areas.
The right hon. Gentleman said that these areas must look more to self-help. At the same time, the Government have taken the regional development grant away, effectively, from very small companies by the way in which they have raised the threshold at which it applies, because in small companies a larger proportion of their total investment is made up of relatively small investment units.
We are told that selective finance is to be increased under section 7. Having lost the support of the IDC system and having seen the regional development grant incentive reduced, surely selective incentives should be increased. Indeed, they need to be increased. Regional development grant as a percentage of total cost is inevitably index-linked. Its value increases as the cost of machinery increases. There is no such linkage under section 7. Therefore, one would expect the Government to try to sustain the real value of selective assistance. That would mean an increase of at least 10 per cent., and 30 per cent. by next spring, to retain the administrative ceilings that were introduced only a little while ago. In fact, actual and real values will diminish under section 7.
As the right hon. Gentleman indicates, and as we all recognise, Britain, especially the regions, depends on inward investment. At present, 20 per cent. of manufacturing industry is overseas-owned. My colleagues in Lancashire and in assisted areas in Scotland know what a high proportion of industry in those areas comes from abroad. The right hon. Gentleman said that we gain from inward investment, yet the cuts in regional development grants and section 7 assistance mean that we cannot reach the ceilings for financial assistance that are permissible under the EEC regulations. Therefore, France, Germany, Belgium and our other Common Market colleagues will be offering packages of incentives that we shall not administratively be able to match because of the changes that the Government have made.
We shall be disadvantaged in obtaining internationally mobile industry at a time when there will be the minimum of domestic mobile industry. Two years ago private sector investment was increasing by 13 per cent. in British manufacturing industry. Last year it was increasing by 14 per cent. This year, under the Labour Government, it was expected to increase by 4 per cent. We now find in the Red Book that investment will not give us growth. We shall see a fallback of ½ per cent. in private investment and 4½ per cent. in public investment. As others have said, that is probably a grave understatement.
There will not be domestic growth and there will not be domestic mobile industry. The Government's decisions have cut us off from much of the internationally mobile industry. All that has happened at a time when the world is moving into a deepening recession. At this stage the Government choose to cut £1,000 million over a five-year period from the assisted areas.
The right hon. Gentleman gave us a load of economic claptrap about the effect of raising finance on alternative industry. The £233 million is ½p on the standard rate of tax. According to the right hon. Gentleman, that ½p would be a major debilitation for industry. Until the middle of February the Labour Government, under section 8 of the Industry Act, offered £385 million worth of Government assistance, the equivalent of 1p on the standard rate of tax for a year.


That generated £2,400 million worth of investment projects. Does anyone genuinely believe that 1p off the standard rate of tax for one year could have achieved the same result? That demonstrates the nonsense of the argument advanced by the Government.
We have seen a cut in regional aid. We have seen a change in the industrial development certificate system. Within the assisted areas we shall see bitterness and contention. That is already beginning to emerge from the contributions made by my right hon. and hon. Friends. It will arise because of a descheduling and downgrading of various areas. The Government treat these matters with the utmost cynicism. In an interview a year ago, it was reported in the Financial Times that the then Opposition saw as a logical step the need to redraw assisted area boundaries. They stated that there was no intention to undertake that exercise before a general election because it would be seen more as a matter of administration than of principle. Over 300 names appear on the list of areas that have been downgraded. Is that mere administration? It is certainly policy for every area.
Would the Conservatives have won Nelson and Colne and Rossendale if they had had the guts to tell people in those areas and elsewhere in Lancashire, Yorkshire and Wales what they intended to do about the incentives that are so essential to their survival?
As a result of the changed IDC policy, we have a new policy. It does not involve steering non-assisted areas into assisted areas. The result will be that Merseyside and the SDAs of the North will draw the industry that may have gone to Yorkshire and Lancashire. The South will continue to be largely free of industry loss and we shall have a regional policy based on areas of need having to subsidise neighbouring areas of even greater need. That is what the Government advance as a regional policy.
We have been through all this before. The Secretary of State will say complacently that his policy will work. In 1970 I well recollect standing on almost this same spot and trying to persuade the then Conservative Government not to abolish the old investment grants. They had introduced tax cuts and they cut

regional policy. What happened? Investment in manufacturing industry when the Conservative Government took office had been running at £4,200 million a year. Two years later, under their tax-cutting policy, it had fallen to £3,500 million. It never recovered. What did that mean to the regions? As I have already said, investment, according to the Red Book, will fall again in the next 12 months.
The consequence of the previous Conservative Government's policies was that in development areas and SDAs between 1969–70 and 1971–72 we saw a fall of 50 per cent. in the amount of new industry entering those areas. It fell from 28 million sq ft to 14 million sq ft. Wales suffered even more grievously. It saw a decline from 8·1 million sq ft to 2·9 million sq ft.
We have been through these cuts in regional policy before. As it was obvious that there would be no time and no opportunity for many Welsh Members to participate in the debate, nor Scots Members—I appreciate that every region is having difficulty getting its voice heard—I asked the Secretary of State for Wales a week ago to arrange a sitting of the Welsh Grand Committee before the Summer Recess so that Welsh Members could debate the cuts that will be made in Wales. The same could have been done for Scotland.
As unemployment moves inevitably towards the 2 million mark, the assisted areas will have to carry more than their share, especially those that have been downgraded. The tragedy is, having been through all this before, that too late will the South and the Midlands realise that what is bad for Wales, Scotland, Lancashire, Yorkshire and the North generally is also bad for the South. As I say, that realisation will come too late.

Mr. Bob Cryer: On a point of order, Mr. Deputy Speaker. I rise to refer to the statement on page 481 of the current Order Paper relating to the draft Regional Development Grants (Variation of Prescribed Percentages) Order 1979. The following words appear:
"The Instrument has not yet been considered by the Joint Committee on Statutory Instruments."
As Chairman of the Joint Committee, I must tell you that this afternoon the Committee considered the order, which


was finally laid, and reported it to the House. Copies of the extract of the fourth report of the Joint Committee, which refers to the order, are now available in the Vote Office.
The Committee indicated that, in its view, the order could be withdrawn and a new corrected draft made. There is a defect in the order which I understood was referred to in the opening speech of the Secretary of State for Industry.
In the view of the Committee, the proposed procedure is less than satisfactory. I hope to catch your eye, Mr. Deputy Speaker, to elaborate briefly on the views of the Committee as, quite clearly, they are important and relevant to the decision that will be taken later.

Mr. Deputy Speaker (Mr. Richard Crawshaw): I was alerted to the fact that the hon. Gentleman intended to raise this point of order. If he seeks to catch my eye, he may have the opportunity of elaborating on that point.

8.2 p.m.

Mr. Robert Hicks: I have always believed that the primary purpose of, indeed the justification for, our having an elaborate regional policy was assistance in the attainment of an economic and social structure in the United Kingdom whereby each region contributed to and shared in the nation's prosperity.
It is often argued by those who are opposed to State intervention of this kind that the most effective regional policy is a fast-growing national economy. Even if there is an element of truth in that viewpoint, it does not alter the position that regional disparities still remain. Thus the nation as a whole has an obligation to try to improve the level of economic activity in the less prosperous parts of our country. In addition, in this age of rapidly changing technology and patterns of demand, there is the problem of our declining industries, especially key industries in an area's economy. Here again I believe that the nation has an obligation to those regions, although not necessarily to any industry.
Therefore, for those brief reasons, I am an unashamed supporter of the principle of regional policies. Indeed, I was one of the Government supporters who, to put it at its best, were somewhat apprehensive in advance of the Secretary

of State's announcement last Tuesday. In practice, in general terms, I was rather relieved at some of its contents. However, some parts of my right hon. Friend's statement this afternoon gave me cause to worry.
I accept that regional policies, in their own right, do not create jobs. Regional policies influence the location of investment in this country. In turn, that investment, wherever it is made, we hope, creates jobs. To justify this significant reduction in the amount of money that is to be made available, my right hon. Friend said that regional policies had created only 20,000 jobs per annum on average over the past few years. With respect, that misses the fundamental point.
Regional policies are essentially a defence mechanism. They help to preserve the status quo. We cannot quantify the numbers of jobs that are saved as a consequence of having regional policies at any time. It would be impossible to quantify the number of jobs that would have been lost had we not had effective regional policies. Furthermore, I take the view that without regional policies we should have seen an even more pronounced drift—a movement of people and economic activity—from the North, the West and the South-West to London, the Home Counties and the Midlands. That is the justification for positive regional policies.
I agree that my right hon. Friend was right to try to sharpen the differential between the development areas of the United Kingdom and the non-assisted parts. I was somewhat relieved by the fact that where there is to be a loss of status it will be spread over three years. At least my right hon. Friend has learnt of the experience of Members on both sides of the House of the difficulty and problems that arise as a result of abrupt change.
Another point in my right hon. Friend's statement that I commend to the House is the fact that he refrained from changing the basic structures of our regional policy. The Industry Act 1972 remains. There has been an intended change in the level of grant, but the principle of the regional development grant still remains. Sections 7 and 8 of the Act remain. As one who spoke in the


Second Reading debate in 1972 and served on the Committee, I am at least relieved that this is one area where we remain consistent and have not given in to current trends that may be popular at present.
One wider aspect that concerns me is the fact that, even at the end of 1982, if everything proceeds according to plan, we shall still be spending almost £400 million on regional policies. It is right to ask ourselves how we shall use the most effective means of achieving regional regeneration and holding the level of economic activity in the regions, especially at a time of world recession.
Hon Members on both sides have said that over the past few years regional disparities in the United Kingdom have been reduced. But, sadly, in my part of the United Kingdom, the far South-West, that has not happened. Whatever criterion we choose—whether it be unemployment or the level of average incomes—we find that the disparity has increased. Whether we compare average unemployment in our region with that of the rest of the United Kingdom or average income in Cornwall with the national average, we find that the gap has widened.
Therefore, in that context, I suggest the concept of some form of South-West development agency, with an agreed budget, whereby the region could sell itself in the national or international market. That is the self-help that my right hon. Friend mentioned earlier this afternoon. Would not it be a good idea if the South-West had its own development agency so that we could go out into the market and attract suitable economic activity to our region? I put that idea forward. It might be a more than worthwhile experiment. Such an agency would have the responsibility for encouraging the indigenous economic activities within the region.
In the South-West we do not have a Scottish Development Agency; we do not have a Highlands and Islands Board; we do not have a Welsh Development Agency; we do not have a Development Board for Rural Wales. The only assistance through an agency that we have is through the Development Commission

which serves all the English rural regions. When we look at the average assistance that the South-West region obtains, compared with its counterparts in Scotland or Wales, we find that the budgets in Scotland and Wales for the development agencies, plus the regional development structure, are very considerable indeed compared with our receipts.
This may be the reason, or one of the reasons, why we have an unemployment problem in the South-West at a higher percentage now, compared with the national average, than the figure of five or 10 years ago. That is why average earnings in Cornwall are the lowest of any part of the United Kingdom, namely, 83·8 per cent. of the national average income.
I find myself in a difficulty this evening. As one who has always supported the concept of an active, strong and effective regional policy, I dislike these significant cuts of one-third, yet I find myself in the ironic position that whereas before last Tuesday seven-eighths of my constituency was in a development area and one-eighth in an intermediate area, now the whole lot comes within a development area.
I want to see a meaningful and vigorous regional policy. I am relieved that there has been no dismantling of the structures. Circumstances may change over the next three years, but it is incumbent upon us all that we have a cost-effective regional policy.
One or two speakers have mentioned during the debate the dangers of a divided Britain, with the more prosperous South-East and Midlands and the less prosperous North and West and my own South-West. I believe that this is the greatest single economic and social problem facing the country. The distribution of seats at the last general election tended—sadly, in my view—to catalyse this division politically.
I therefore ask my right hon. Friend to remember that the decisions that he and his colleagues make in respect of regional policies will, in both the short term and the long term, have a real influence on whether we have a divided nation. I hope that nothing that he does will contribute to the emergence of a divided Britain over the next decade.

8.13 p.m.

Mr. Bob Cryer: I am grateful to you, Mr. Deputy Speaker, for calling me. I know that many of my colleagues are pressing to enter the debate. I shall, therefore, be brief. I believe that my contribution is both relevant and important, in that in addition to the motion we are debating a statutory instrument. The House has established a Statutory Instruments Committee, the purpose of which is to examine those instruments to see whether there is, for example, an abuse of power, an unusual use of power, an unusual use of public expenditure, whether the instrument is ambiguous, and so on. We take those responsibilities seriously.
I think, therefore, that where an instrument is being debated, it is relevant and important that the House should be reminded for three or four minutes of the reasons why the Joint Committee on Statutory Instruments should, out of the hundreds of orders that we have to examine, report to the House the draft Regional Development Grant (Variation of Prescribed Percentages) Order. An extract from the report relating to this instrument is in the Vote Office.
The brief background is that the original statutory instrument that was laid was described to us by one of our counsel as ultra vires because of defective drafting, with the result that the amendment to the table in the original Act would have been done in such a manner as to be outside the powers allotted to the Secretary of State for that purpose.
When this was drawn to the attention of the Department, and we asked for witnesses from the Department to come to the Select Committee, the Department, presumably being apprised of that fact, then withdrew the original instrument and laid a fresh instrument before the House. We were therefore in the position of having witnesses available, and we chose to examine the witnesses, because during the course of examination of the fresh instrument we learned that it was also defective.
It might seem to be a relatively trivial defect. The Secretary of State has power to name the date, but he had named the date that was relevant in his speech of 17 July and it did not match up with the date adumbrated in the new, amended, replacement instrument. We therefore

thought that the Department was not exactly shining at producing instruments that were clear and without fault. We addressed these questions to the witnesses so that they could say what they proposed to do. I understand that the Secretary of State referred to this in his opening remarks and said that the Department proposed to put down an amending instrument to alter the date in the replacement instrument from 17 July to 18 July.
As this is an affirmative instrument, it can be debated by the House for an hour and a half. If hon. Members chose to exercise their debating rights in regard to the instrument, they would be debating the narrow point whether the date in one of the articles should be 17 July or 18 July. Clearly, in my view and in the view of the Committee, it would be a waste of parliamentary time to argue for one and a half hours when there are much more important and urgent matters to be brought before Parliament, but that is the position.
The Committee, therefore, in its report has suggested that the instrument, rather than being pursued tonight, could be withdrawn and that an amending instrument, which is complete and comprehensive—one hopes that the Department will be lucky on the third occasion and get it right—could be placed before the House and put through before the recess. The report points out that officials have indicated that an amending draft order will be laid to correct the mistake and that the motion to approve it will be taken after the Summer Recess. The Committee considers this to be a most unsatisfactory course. It points out that the present draft order could be withdrawn and that a new corrected draft could be laid, and that approval could be sought to it before Parliament rises for the recess. The regional issues having been discused tonight, there is no reason, in the Committee's view, why this could not be done.

Mr. Graham Page: I support the hon. Member for Keighley (Mr. Cryer) in what he is saying to the House. Does he not think that it would be a complete farce for us to approve a draft order tonight, knowing perfectly well that it is wrong, for another place to approve it tomorrow night knowing perfectly well that it is wrong, and for the order to be


made the following day, everybody knowing perfectly well that it is wrong, and to have an amending order in three months' time? It would be quite possible to withdraw what is before us tonight, to amend it in ink, put it on the Table, and lay it tomorrow. I am sure that both sides of the House would allow it to go through without further debate.

Mr. Cryer: I am grateful to the right hon. Member for Crosby (Mr. Page). As a former Chairman of the Joint Committee on Statutory Instruments, obviously his remarks are relevant and to the point. We understand this process, because it occasionally occurs. People outside would regard it as plainly daft to pass an order which is defective, knowing that an amending order will be processed in three months' time. In addition, the people affected by the order may well find that they have been given misleading guidance by the order and be discouraged from making application for regional grants which they are perfectly entitled to do, grants which hon. Members have indicated tonight are relevant and important.
If that is so, it seems to me quite wrong for the House to put through an order which could be misleading, discouraging and which we know full well will be corrected at the end of the recess. Therefore, I urge the Secretary of State to withdraw the order and substitute a full and proper order, so that the House is not brought into disrepute and its legislative processes can be seen for what they are—clear and unambiguous.

Sir Keith Joseph: On a point of order, Mr. Deputy Speaker. I do not wish to dispute one word of what the hon. Member for Keighley (Mr. Cryer) said or what my right hon. Friend the Member for Crosby (Mr. Page) said. The responsibility is mine. There was a defect in the second order by 24 hours. As the hon. Member for Keighley has acknowledged—I do not think that he was present but I explained this in my opening statement—the House agreed to the proposition that we should take the motion and the order at the same time. Therefore, according to the decision of the Chair, there may be two or three votes at the end of today's proceedings. In order to change that and do what the hon. Mem-

ber for Keighley and my right hon. Friend the Member for Crosby suggest, the Government would have to withdraw this order. The question is whether that would not make the intervening few months more uncertain than if we were to go ahead, as the Government propose, and vote tonight on the understanding that before the House rises for the recess an order will be tabled revising the date by 24 hours. Everyone in the business community will then have clear warning of the correct date.
By its decision the House has already opted not to spend an hour and a half debating the order separately tonight. It is true that the amending order, as it is subject to an affirmative resolution, can be debated after the recess. Whether it is debated will be for the House to decide. It may be that the House will decide not to debate it, in which case no time will have been wasted. If the House decides to debate the order, it will be one and a half hours then instead of tonight.

Mr. Graham Page: Surely it is possible to withdraw the draft order which is before the House at present and to lay the corrected draft order tonight, before 10 o'clock. It could then be voted on tomorrow, when I would hope that the Opposition would allow it through, having debated the whole subject fully today, without a further one and a half hours being necessary.

Mr. Cryer: The interjection by the Secretary of State was less than satisfactory. I was not here for the opening of the debate, simply because the Committee was sitting and hearing evidence from Department of Industry witnesses. The Committee considers—we made it quite clear in our report—that to proceed as the right hon. Gentleman suggests would be unsatisfactory. It would be simpler for this order either to be withdrawn and another order laid, or an amending order laid in conjunction with this order, so that we did not have the daft situation of a three-months gap.
As I said in my earlier remarks, it is simple for us to understand, but our legislative process affects millions and we should strive, where it is within our ability, to make things as simple and clear and as easily understood as possible. The process that the Secretary of State


is suggesting will not do that. The process that the Committee is recommending can be got through. The debate has been held. The amended order can be placed before the House and it will be up to the House to decide what to do with it. But the House would at last have one correct order. That is the procedure that I believe we should follow.

Sir Keith Joseph: Sir Keith Joseph rose—

Mr. Deputy Speaker: I feel, with the greatest respect, that we should proceed with the debate.

Sir K. Joseph: On a point of order, Mr. Deputy Speaker. A new proposition has been suggested to the House. Obviously I want to co-operate with the Committee, but I am advised that there is a problem about the amount of notice that is necessary before an amended order can be voted upon. I should like to have a few minutes to consult to see whether what the hon. Member for Keighley suggests is, or is not, practical. If I may, I shall intervene again later.

Mr. Les Huckfield: Further to that point of order, Mr. Deputy Speaker. Though I take note of what the Secretary of State said about the House having agreed to consider the order and the debate at the same time, he will recall that when he said that it would be convenient for the House and asked the leave of the House, we had not heard his statement on what he proposed to do to the order. By our silence we assented to taking the two issues together before we heard the right hon. Gentleman's explanation. Having heard his explanation, I place great weight on what was said by my hon. Friend the Member for Keighley (Mr. Cryer), who is the Chairman of the Committee. On behalf of my right hon. and hon. Friends, I can say that we certainly take very much to heart what my hon. Friend the Member for Keighley said.

8.27 p.m.

Mr. Fred Silvester: My hon. Friend the Member for Bodmin (Mr. Hicks) and I must share the distinction of being among those on the Government Benches most favourably disposed towards regional policy. Therefore, it is of some interest how we approach the present proposals of the Government.
I take the view that regional policy is not a temporary matter. As my hon. Friend the Member for Oxford (Mr. Patten) said clearly earlier today, regional policy is something which will, and should, continue. It arises because there is a fundamental imbalance between various parts of the country, and the natural pull and economic advantage of the South-East is not something that will go away. The fact that the capital remains here makes that inevitable. An active and effective regional policy is not a palliative for the regions of the country but a permanent and everlasting policy for a country which is as highly centralised as ours.
Having said that, I think that we must judge how we approach the present proposals. I have no difficulty regarding the present proposals. The Secretary of State has disappeared to consult on the procedural point, but it may come as a surprise, in view of our previous battles on these matters, that I compliment him on his present proposals.
The man who tackles the question of the boundaries is, I believe, a brave man indeed. It is inevitable that whatever one does there will be people who have particular axes to grind or particular local interests. Manchester will disappear altogether from the assisted area list. No doubt that will cause me a great deal of local aggravation. Nevertheless, it is true that the map had become wholly indefensible. It is therefore important, if one is redrawing it, to try to do so in such a way as to give the basis of fairness between one region and another. To do it on the basis of the unemployment statistics, together with some understanding of what is likely to develop in the near future, is the best way of going about it.
Therefore, I compliment my right hon. Friend on tackling this problem. But, as T. S. Eliot said,
The last temptation is the greatest treason: To do the right deed for the wrong reason.
I would share the disquiet of some of my hon. Friends if I thought that changes were made not because the map had become unfair but because it was desirable to produce a quick £200 million out of the regional assistance budget. I say that because I do not think that people generally understand the extent to which there is a considerable bias in public expenditure in favour of the South-East. It is


generally overlooked—my right hon. Friend showed this again today—since regional aid is so easily identified as something that can go into one region or another, that a lot of other public expenditure is heavily biased towards the South-East and London, not least the salaries of civil servants and others. Therefore, one must be careful when one talks about the need to prop up the regions by giving them extra public expenditure, especially when they may he doing nothing other than trying to equate their share.
For example, my right hon. Friend talked about one of the effects of the cost of regional policy as imposing taxes upon other businesses. I suspect that he would not do that with other forms of tax cost. It is rather like supposing, as is sometimes argued with the car tax, that there is a discreet industrial fund. It is to argue that the money that has been spent out of the general tax pool for the North-West or the North is somehow a burden upon industry, whereas taxation for the purpose of roads, hospitals and so on is not. I do not believe that argument to be tenable. It is, therefore, not one that I hope my party will advance too often.
Nevertheless, to those of us who support some kind of active regional policy, it is of great importance not to try to do it on the basis of maintaining the sacred cows and vested interests or the barnacles that have become encrusted on the whole structure. I was delighted to hear about the end of the economic planning councils. I could suggest a few other bodies that could well be axed. In the process of trying to get industries into these areas an enormous industry has developed, and it is about time that there was some pruning there in order to get back to the nitty-gritty—the spending of money on the provision of jobs rather than spending it on talking about the provision of jobs and the setting up of yet more conferences and plans to do so.
We are therefore faced with the opportunity as well as the difficulty. I have no doubt that it is right that regional policy, like every other part of public expenditure, should bear its fair share of the burden that has arisen because of the enormous increases in wage costs within the public sector. I understand that these

are likely to run at about £4½ billion. They are large and additional sums. It is, therefore, inevitable that all areas of public expenditure should play a part, including regional policy.
However, we should not forget that there are areas that are not labelled "regional policy" that do not come under the Department of Industry's Vote and that are of immense importance. I refer particularly to those areas which come within the sphere of local government and concern various forms of infrastructure improvement. We in the North-West, like many other areas, are faced with essential problems that bear as heavily on industrial development as anything else. For instance, Manchester is faced with a rate burden and a diminishing rate base that makes it extremely difficult for small companies and other new companies to make a rational decision to go into the centre of the city. The rate burden is enormous, partly because of the way in which the council runs its policies, but also inevitably because of the drift of people from the city centre.
Similarly, we have whole areas of backlog to be cleared up. I cite local examples because I know them best—but they will be duplicated in other parts of the country—such as the sewer system, which is totally collapsing. If that is a matter which has to be borne by the local community, and a community which has a smaller industrial base and a weaker rate base, it will be very difficult for them to do it.
Therefore, I hope that in looking to making savings in public expenditure, the Government will nevertheless remember that there is a real necessity on the part of any Government, Conservative or otherwise, to make a continuing commitment to the recycling of some of the resources of the country back to the regions to make up for the inevitable drift to the South-East. That may well be better done by spending money on infrastructure changes and matters that come under the rates rather than by the regional development grants about which we have been talking today.

8.36 p.m.

Mr. D. E. Thomas: This is probably the most important debate affecting Wales and other regions in


England and the national region of Scotland that we have had in this Parliament. The effect on both my constituency and on the whole of Wales is potentially disastrous. The Blaenau Ffestiniog special development area in my constituency is downgraded to a development area. The Llangollen travel-to-work area becomes an intermediate area. Barmouth, Machynlleth and Towyn move from being development areas to being completely non-assisted areas.
I have received a letter on this subject from the director of one of the three remaining slate quarries in the constituency—hardly a mobile kind of industry—and it is typical of the comments that I have had from employers. It states:
The consequences of such action would be disastrous for our company, as its future capital expenditure will naturally he drastically reduced.
These days we are continually hearing in the media, as we have since before the general election, about the self-styled philosophy of the Secretary of State for Industry. It appears to me—I think that this was confirmed today—that his philosophy is none other than a very simplistic ideology, based on a very inadequate economic analysis—on the reliance on market forces.
As someone who represents a less-developed region, I know that we have been on the receiving end of the operation of market forces for many years. Regional imbalance in the case of Wales and of the other regions, as the hon. Member for Manchester, Withington (Mr. Silvester) has pointed out, is not a geographical accident. It is not a natural tendency. It is a factor in the very economic system in the countries of Britain. It results from the domination of peripheral areas by central areas. It is a geographical inequality, a horizontal inequality, which compares with the vertical class inequality. I think that the Secretary of State for Industry, in all his speeches, exhibits his devotion to the maintenance of both.
We have an uneven development in the concentration of capital in the South-East and the Midlands which affects adversely the development of new jobs in the regions, not only in Wales but in the other regions of the United Kingdom.
There is a dependent economy which has been created in Wales and the other regions by the centralisation of capital. Local development is inhibited by lack of local capital. There is a lack of infrastructure for diversified manufacturing, and the peripheral regions become narrowly specialised. They become export economies. Our most valuable exports are not only Labour Members to serve English constituencies from the Opposition Benches but also young technologists, who are still exported. Indeed, over 500,000 of our working population, throughout this century, have been exported from the economy of Wales to serve in the central areas.
From what we have heard this evening, it seems that the Secretary of State for Industry, with his euphemisms about the mobility of labour and a labour shortfall in the overdeveloped or more developed areas of the economy, tends to perpetuate and, indeed, to intensify that very system.
We have had quotations from George Bernard Shaw and T. S. Eliot. I hope that I shall have the forgiveness of the House for quoting Marx:
The territorial division of labour … confines special branches of production to special districts of a country".
That is not merely a Marxist quotation from "Das Kapital", but it is appropriate to the economic system from which Wales and the other regions of this country suffer. I do not expect the Secretary of State to accept that analysis for a moment, but at least he ought to look at it and realise that regional policy is an attempt to intervene in the centralisation, in the centrifugal forces of capital accumulation. Indeed, the whole history of regional policy, inadequate as it has been over the years in its effect on Wales, teaches us that we cannot leave the location of jobs entirely to market forces.
The hon. Member for Vauxhall (Mr. Holland) has writteen a major book on the theme, "Capital versus the Regions", which I recommend to all civil servants in the Department of Industry. The analysis stresses that if the market system is to be adequate for correcting regional disparity and for creating new investment,
the investment opportunities in the less developed region will have to be greater than those in the more developed region if a re-entry of


savings and a cumulative growth process are to be started by the free working of the market
in the less developed areas. He goes on to stress that
there is no once-and-for-all element in a successful regional policy. For even if the productive structure and regional competitiveness of a less developed region is improved to the point at which it can be said to be 'aligned' with a more developed region, then the free working of the market will initiate further cumulative imbalance unless monitored and offset by government policy.
Clearly, by their withdrawal of regional aid the Government are determined not to offset the operation of market forces.
In the 16 years from 1960 to 1976 the net benefit to Wales of regional policy was the creation of 76,000 new jobs. That did not offset job losses in basic industries, and those losses will be increased by the decision of the Secretary of State for Industry to axe steel making in part of my county of Clwyd, at Shotton.
The Secretary of State partly quoted from the study of Barry Moore, John Rhodes and Peter Tyler on the impact of regional policy in the 1970s. That study indicated that the total effect on Wales was that increase of 76,000 jobs, and I am therefore appalled to see the Secretary of State for Wales so warmly associated with the package that is before us today. He is clearly presiding over a further disastrous collapse in the Welsh economy, and I am not surprised that he is not prepared for us to discuss these cuts in the Welsh Grand Committee and he chickened out of making a statement on the issue.
The Labour Benches are not free from criticism. The right hon. Member for Swansea, West (Mr. Williams) earlier appeared as a major defender of regional policy, but there has been a progressive weakening of regional policy throughout the 1970s under Tory and Labour Governments. The strength of IDC policy has declined by about half during the 1970s. Even if the withdrawal of REP was forced on the Government by European policy, the fact remains that about £30 million was lost in specific investment in the Welsh economy through that withdrawal.
It is not good enough for the Secretary of State to pretend that the fact that 40 per cent. of the United Kingdom is now an assisted area—the so-called plateau effect—prevented the regional policy from

being effective. The major factor preventing that is that the strength of the policy has been withdrawn and its bite has declined under both Labour and Tory Administrations.
If the Secretary of State can quote Moore, Rhodes and Tyler, so can I, and I shall get my figures right this time. The projected estimated total loss of manufacturing jobs as a result of the cut in regional employment policy in the assisted areas from 1976 to 1980 is between 23,000 and 45,000. There are also jobs lost indirectly through unemployment. We are therefore facing not only the effect of the cut in REP but this further reduction in regional policy.
The link between regional policy and taxation has been clearly exhibited in these proposals. What is regional policy if not transfer payments to the less developed regions out of the income of the richer classes in the more developed regions? That is the aspect which angers me most. The Government's decision on regional assistance is part of their whole policy of favouring their supporters and blatantly favouring the class that they represent. The working people of Wales are taking note of what the Government, for whom we did not vote, are doing to the Welsh economy.

Several Hon. Members: Several Hon. Members rose—

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Mr. Barry Henderson.

Mr. Robert Hughes: On a point of order. Mr. Deputy Speaker. I regret having to raise this matter, because I appreciate the great difficulty of the Chair in calling speakers in such a major and serious debate. However, I wish to put on record my strong concern that no Labour Back Bencher from Scotland or the North of England has been called. We have had two Conservative Members from Scotland, one right hon. Member representing a minority party in Scotland and one hon. Member representing a minority party in Wales. Of course, they are entitled to their point of view, but the major Opposition party is also entitled to a proper share of the debate.

Mr. Robert C. Brown: Further to that point of order, Mr. Deputy Speaker. I am a member of the Northern group of Labour MPs and, with four of my colleagues,


I have been in the Chamber all day waiting to be called. I take a dim view of the fact that not one hon. Member from the Northern region—including the hon. Member for Newcastle upon Tyne, North (Sir W. Elliott), who came in earlier prepared to make a speech—has had an opportunity of contributing.
We have seen the spectacle of the hon. Member for Manchester, Withington (Mr. Silvester) being called to speak just after walking in from the cold and sitting down. You have now called another hon. Member who has not been in the Chamber for more than 10 minutes. It is monstrous that five hon. Members from the North of England have sat here all day and you, Mr. Deputy Speaker, have not seen fit to call any one of us—not even my right hon. Friend the Member for Durham, North-West (Mr. Armstrong), who is a Privy Councillor.

Mr. Deputy Speaker: We still have 25 minutes before the winding-up speeches begin. If hon. Members exercise control over their eloquence, it is conceivable that we may be able to fit in all hon. Members from the remaining areas.

Mr. Dan Jones: Further to that point of order, Mr. Deputy Speaker. I join the complaints of my good friends from the North-East and Scotland. I represent an area in which the textile industry has been decimated, but no Labour Member from that area has been called to speak in the debate.

8.48 p.m.

Mr. Barry Henderson: I shall seek to be brief, but I should point out that I have been in the Chamber all afternoon except for a period of about one hour.
I could prove to the hon. Member for Merioneth (Mr. Thomas) that the Government's proposals are not politically inspired, as was all too often thought to be the case under the previous Government. I warmly welcome the general principles underlying the redistribution of the development areas. The redrawing of the map was long overdue, as was the need to get better value for taxpayers' money.
Scotland as a whole benefits substantially from the changes, but my constituency suffers more than most. Indeed, it is the only constituency in the kingdom of

Fife that has had its development area status reduced.
It is in the context of general approval of the measures that I should like to raise a number of points that I hope my right hon. Friend the Secretary of State for Scotland will answer or at least bear in mind for future consideration. They emerge from the desire to improve the selectivity of the regional development measures and to avoid abrupt changes.
In the context of avoiding abrupt changes, I envisage the following problem. A major capital project may have received stage payments before 18 July 1979 for goods which will not finally be delivered until after 1 August 1980. Many people outside the House are anxious to know how that problem will be handled. What happens when a genuine project has already been submitted to the Government for consideration, say two months ago, under the energy-saving scheme, which could have been initiated before 18 July 1979 but for the time taken in consideration in Government Departments? Will the contribution from regional development aid be given to those people when even an order that is placed today could not physically be delivered within the period of a year? If delivery is genuinely and reasonably expected to be made before 1 August 1980 but that delivery is not met through no fault of the purchaser, for example, because of an industrial dispute on the supplier's premises, what will happen? That important point should be considered.
I believe that my right hon. Friend the Secretary of State for Industry should acquire powers to be able to deal with anomalies of the sort that I have mentioned, where everything is done genuinely and in good faith and yet, for one reason or another, ground may be lost, thereby losing substantial sums of money to major capital projects. I hope to see greater selectivity exercised in the matter.
Several areas in my constituency have been reduced from development area status to intermediate status and some have moved to non-assisted status. One has moved from special development status to development status. The Cupar employment office area is geographically large but it is sparsely populated. I accept that, on the broad principles by


which the Minister may be guided, it is probably correct that the whole area could not reasonably be considered to maintain development area status. However, within that substantial geographical area there are serious pockets of deep unemployment. I draw my right hon. Friend's attention particularly to the town of Newburgh, which is many miles away from any other significant centre of population. It is unfortunate for the town that it is on the extreme periphery of the Cupar employment office area. It is also on the periphery of another area. Yet it is a town which has seen the catastrophic failure of the major employer within the past two or three years. There is severe unemployment in the town and it is not part of the general economic activity of what in bureaucratic terms is referred to as the Cupar employment office area. I hope that it will be recognised that that is too broad a bureaucratic brush with which to work and that my right hon. Friend will hold out some hope that special cases of individual towns in isolation within the area will be given some consideration.
The Scottish Development Agency is scheduled to build an advance factory before the end of this year. I should like an assurance that that project will still go ahead. In addition, there has been a substantial amount of private enterprise activity to build up what is, in effect, a private enterprise industrial estate on a tiny scale, which so far has cost no public money. I believe that that effort needs especial encouragement of the type provided by these selective measures.
The next area on a selective basis comes within the St. Andrews employment office area which will lose its development area status. The town of Guard Bridge is on the periphery of that employment office area, one mile from the border of the special development area based on the Dundee employment office area. One company engaged in the production of paper employs a third of the working population of Guard Bridge. That is a cyclical industry which has faced particular problems. That company, with the aid of able management and great co-operation from an efficient work force, has managed to survive the rigours of the past five years because of its own efforts. I hope that those efforts

will not by stymied at this stage by a lack of sensitivity in selectivity and the placing of development area boundaries.
The last area to which I should like to draw attention is that of Levenmouth. The area embraces both Leven, which is in my constituency, and Methil, which is in the constituency of the hon. Member for Kirkcaldy (Mr. Gourlay). I am surprised that the area has been reduced from special development area status to development area status, because it is next door to Glenrothes new town, which has substantial advantages in attracting industry and retains special development area status. I look forward to discussing with my right hon. Friend whether an injustice might have been inflicted in changing the status of Levenmouth.
In short, the employment office areas, seem to be a bureaucratic, blunt instrument in the more sparsely populated areas. It is not the inhabitants' fault that they must travel so far to reach an employment office. I hope that my right hon. Friend will take serious note of these points in seeking to help a constituency which, because of the efforts of its people and the activities of small businesses, has done very well for itself. It recognises that in broad terms the general trend of Government policy is right but that it will be made more effective if more selective measures are employed in some instances.

8.58 p.m.

Dr. Oonagh McDonald: I listened with interest to the statements which were made last week by the Secretary of State for Industry on regional policy and the National Enterprise Board. I also listened with care to his opening speech in this debate. Comments have been made about the right hon. Gentleman's passionate commitment to market forces, yet we find when we examine his statements that his commitment turns out to be not so real after all. If one is committed to a belief in free market forces, one would surely scrap regional policy entirely.
However, the right hon. Gentleman has allowed the basic structure of regional policy to remain. He has not taken the opportunity to carry out a thorough review of regional policy. Instead, the withdrawal of regional assistance from various areas has been carried out haphazardly, and this will result in increased


unemployment. The right hon. Gentleman has not taken the opportunity to examine changes in the structure of employment or changes in the industrial geography of the United Kingdom, following the discovery of North Sea oil and its implications.
That means that the sharp cut in regional aid will lead to increased unemployment. It also means that many companies which are already likely to face severe financial difficulties in the coming months will find that those difficulties have been increased by Government action. Indeed, we will find over the next two or three years, when regional aid is finally withdrawn from many companies, that they will suffer greatly as a result. The Secretary of State has not helped the traditional development areas, nor has he done anything to help other non-assisted areas such as London and the South-East.
The Secretary of State has made play of withdrawing IDCs, but, contrary to what some of my hon. Friends have said today, those policies have been weakened greatly over the past two to three years. In London and the South-East, in 1977 only two applications for areas up to 50,000 sq. ft. were refused, in 1978 seven were refused, and in the opening months of 1979 only two were refused. That means that there are areas in London and the South-East that are urgently in need of assistance. The inner urban areas have been mentioned already by my right hon. Friend the Member for Deptford (Mr. Silkin). There is a tendancy to look particularly at inner urban areas.
However, I remind the Secretary of State that there are other areas such as my constituency of Thurrock which have had unemployment levels of between 7 per cent. and 8 per cent. over the last few years. The relaxation of the IDC policy over those two to three years has not helped Thurrock.
Unemployment in Thurrock is due to structural changes—the closure of old industries such as quarrying, and the decline of employment in the docks. Thurrock is in need of replacements for those old industries and new opportunities for employment. The right hon. Gentleman's review of regional policy has done nothing to help pockets of high unemployment in regions where the overall level of un-

employment has been low and frequently lower than the national average.
If the Secretary of State is seriously concerned about regional policy and wants to continue with it, he should look at the way in which it has been operating and make the necessary changes. Instead, he has allowed the automatic grants to continue. Very often they go to large companies and are in turn invested in capital-intensive industries. Those grants therefore do not provide an adequate number of jobs. Often that money is wasted entirely and is given to petrochemical industries which would have to be situated in Scotland or the North-East, and therefore that is money down the drain.
I am curious because I believe there is some Question of withdrawing aid from the petrochemical industries, and it is only in response to pressure from some of the major companies that that aid continues to be available. Perhaps the Secretary of State will comment on that. The bias of the regional policy with which the Secretary of State has presented us is towards the large companies, some of which do not need it. That bias is directed away from small and medium firms. He has raised the minimum qualifying levels for grants and allowances and, therefore, many small industries which could provide jobs will not receive assistance. Those small and medium firms are firms of the kind to which the Secretary of State claimed to be so committed during the Government's period of Opposition and during their election campaign. It is those firms that supply important jobs that can provide a spread of employment with different kinds of employment opportunities for people in a developing region. It is those firms that will go to the wall, despite the protestations of the Tories, both in Opposition and in Government, that small is beautiful and that small should be helped.
The Secretary of State has also failed to link regional aid with the number of jobs provided. The cost of present regional aid in terms of providing jobs can often be extremely high. The jobs that it produces are few in number. Why has no criterion been introduced? It is used in other countries and should be used here. As in other countries, the criterion shoud be to make sure that the projects to which aid is given are ones


that fit in with planning for a region as a whole. The Secretary of State's policy fails to meet that criterion.
Any regional policy undertaken by a future Labour Government should take features such as that into account and their regional policy should conform to that criterion. It should look first at the various agencies that are concerned with regional development and make sure that they work together, are integrated and are not competing foolishly against each other. This has happened with many promotion agencies—for example, Milton Keynes and Peterborough competing against each other in a wasteful fashion. It should not be confined to stimulating manufacturing industry in the regions but should also look at the possibility of stimulating service industries. These industries can widen the range of job opportunities and perhaps provide employment opportunities for women. They have an important income impact on the regions and can perhaps lead to the payment of higher wages.
Small service industries may not only fulfil these functions but, unlike large companies, may draw on other small suppliers in the area. They will not have their own subsidiaries to supply their needs. They will not have their own manufacturing companies to supply their needs. They will therefore draw on other small businesses in the area. In that way, employment opportunities can expand.
The pattern operating in France and Germany is flexible and related to the needs of an area which is tested in terms of employment and lack of employment, in terms of average income, and in terms of the level of infrastructure. The policy is not automatic. In France, tax concessions and local rate concessions are granted only if the project fits in with official regional development priorities. The project has to accord with the plans for the region as a whole. A more flexible policy of this kind, which looks again and again at various criteria and tries to fit in a project with plans for the region as a whole, can provide jobs more effectively even than our regional policy has done in the past.
If the Secretary of State is serious about reviewing regional policy, that is the kind

of policy he should have produced instead of merely slashing away at the assisted areas, slashing the amount of money given, increasing unemployment, increasing the depression and poverty in many parts of the country and failing to look at other areas of need. If he had followed the course I have outlined, we might have found what he produced acceptable. Instead, we know that the whole country will have to wait until the Secretary of State's period of office comes to an end and a Labour Government produce a regional policy that will provide jobs and raise the level of income throughout the depressed regions of the country.

9.8 p.m.

Mr. Les Huckfield: I am sure that hon. Members have found this an interesting debate. Many hon. Members wished to speak. I should like to preface my remarks by congratulating those hon. Members who made their maiden speeches. It was 12 years ago in this House that I made my maiden speech on regional policy. I know how those hon. Members feel. The hon. Members for Oxford (Mr. Patten), for Bristol, North-West (Mr. Colvin) and for Cornwall, North (Mr. Neale) have one factor in common. Either their constituents already benefit from the National Enterprise Board or they would like to benefit from the National Enterprise Board.
I am sure that the hon. Member for Oxford realises that 30,000 jobs in the Cowley area are dependent upon British Leyland plants. The hon. Member for Bristol, North-West will be one of the beneficiaries from the siting of the Inmos technology centre in Bristol and I am sure that the hon. Member for Cornwall. North realises that Cornwall county council was recently making strong pleas to have Inmos sited in its area. There is a common interest in preserving the NEB. I hope that hon. Members will press that upon the Secretary of State.
I wish that the hon. Member for Cornwall, North had mentioned regional development grants for tin mining, which is important to his area. There was a change of policy under the previous Government, but some of my right hon. and hon. Friends believe that the issue should be reconsidered.
Many hon. Members wished to take part in the debate. For example, my right


hon. Friend the Member for Durham, North-West (Mr. Armstrong) wanted to mention the Courtaulds closure at Spennymoor, about which he has been anxious. My hon. Friend the Member for Newcastle upon Tyne, West (Mr. Brown) wanted to mention the Vickers Scotswood threatened redundancies and the Tress redundancies with which he has been involved, as I have. My hon. Friend wanted to ask the Secretary of State whether the type of assistance which the Labour Government were prepared to make available will be available under this Government. I am sorry that my hon. Friend was not able to urge the Secretary of State on that matter.
My hon. Friend the Member for Thurrock (Dr. McDonald) made some valid points about the interconnection between service jobs and jobs in other industries.
One of the most refreshing and realistic approaches was adopted by the hon. Member for Bodmin (Mr. Hicks). His speech was more realistic than that made by the hon. Member for Aberdeen, South (Mr. Sproat), who lavishly praised the Secretary of State's statement and then said that under that policy Aberdeen could become a ghost town. It was an illogical speech. I am sorry that he has drifted away.
The most devastating criticism of the policy was made by my right hon. Friend the Member for Swansea, West (Mr. Williams), who was in charge of the administration of regional policy under the previous Government. He was particularly telling when he rubbed home the point that we are depriving ourselves of the opportunity to invest to the limits to which other members of the EEC still permit themselves. I am sure that in the short time that they have been in office the Government have realised that we must be internationally competitive when bidding for multinationals to invest in Britain.
Perhaps the most fascinating aspect of the debate has been to watch the public wrestling match on the Government side of the House. I am talking particularly of the Secretary of State, who has been wrestling with his own conscience. He cannot see how his theoretical beliefs, which oblige him to say that we should not have any subsidies, can be squared

with the need for a regional policy. I am not sure whether the right hon. Gentlemans' conscience or his contact with reality won.
The Secretary of State tried to justify assistance for marginal investment and agreed that in some circumstances such assistance can be justified. In the next breath he said it may be better if the workers move out of the assisted areas to the non-assisted areas. The Secretary of State is being illogical. I am sure that he realises that one cannot operate both those policies at the same time.
The Secretary of State said that he had tried to make the map more fair. What is fair about downgrading an area such as West Cumbria when the rate of unemployment is still increasing and the consequences of the Secretary of State's shipbuilding statement are still to come? What is fair about downgrading an area like that? What is fair about upgrading Blackpool and downgrading Blackburn?

Mrs. Kellett-Bowman: They have not. The hon. Member for Blackburn (Mr. Straw) got his facts wrong.

Mr. Huckfield: What is fair about some of the policy decisions that the right hon. Gentleman announced in that answer which he seemed eager at some stages the other day to want to conceal from the House?

Mr. Hardy: Would my hon. Friend consider the situation fair where in my constituency I have a development area, an intermediate area and an area from which all assistance is to be removed? Would he consider it fair that the area from which all assistance is to be removed has much higher unemployment than the intermediate area, which has slightly higher unemployment than the development area, although I accept that the development area itself will have rather less aid than it had before? Does he not consider that the people of Rother Valley are justified in seeking a reconsideration of this absurd and bewildering state of affairs?

Mr. Huckfield: The more we come across examples such as those that my hon. Friend has given, the more we realise how ridiculous some of the redrawing of these boundary lines will be. All I can say is that it seems that if one


voted Conservative at the last election one has a better chance of one's constituency being upgraded.

Mrs. Kellett-Bowman: That is rubbish.

Mr. Huckfield: I knew that that would provoke the hon. Lady. I only hope that in future she will make the right speech in the right Parliament.
If the right hon. Gentleman is trying to be fair, how is it that he predicts, from the policy that he has announced, a job loss of around 5,000 or 6,000 a year? How is it that he predicts that sort of job loss when even the Conservative campaign guide for 1977 was saying that in 1973–74 our regional policies had created 72,000 net jobs? Again, the Conservative campaign guide says that between 1974 and 1975 regional policies had created 87,000 net jobs. That calculation—and I take the words from the Conservative campaign guide of 1977—was excluding the effects of service industry grants and excluding the multiplier effects.
I hope that the right hon. Gentleman believes his own party propaganda. He ought to come to the House with a more accurate and better prepared set of facts and figures instead of making them up as he appears to have done in connection with his series of statements.
Again, my right hon. Friend the Member for Swansea, West made the point that we ought to have had an overall calculation, a total calculation, of the effects on certain areas of the right hon. Gentleman's steel statement, his shipbuilding statement, his NEB statement, his regional statement and the statement on dispersal of jobs in the Civil Service that is still to come. It is lamentable that with each statement that we have had from the Government, whether it be on steel, regional policy or shipbuilding, they cannot give a precise estimate of the number of jobs that are to be lost.
I know that the right hon. Gentleman has had a great wrestling match with his conscience. He even had to get his Minister of State to make the shipbuilding policy statement the other day because he was too squeamish to face the consequences of the job losses. With each of these statements we ought to have a precise indication from the Government of

the consequences in terms of job losses, because we on the Opposition Benches see every job lost as a real job lost.
The right hon. Gentleman went into the realms of Moore, Rhodes and Tyler. My hon. Friend the Member for Thurrock referred to this, and I think that if the right hon. Gentleman wishes to quote outside sources he ought to get them right. His so-called Moore, Rhodes and Tyler estimates were not correct. The right hon. Gentleman quite rightly said that there was an estimate of some 20,000 jobs a year, and he went on to make his own subtraction from that total for jobs that he deciphered would be lost in other regions as a result of that regional policy. In other words, he presented the Moore, Rhodes and Tyler figures and went on to make the subtractions that he thought should be made. However, if he reads the paper he will learn that the subtractions have already been made. Page 73 states:
It is important to point out that this estimate"—
I am talking about the estimate to which the right hon. Gentleman referred this afternoon—
represents net employment creation and automatically allows for any changes in the number of manufacturing job losses arising directly from regional policy.
If the right hon. Gentleman is to quote from the Department of Applied Economics in Cambridge and if he is to give us some independent estimates, let him quote them correctly. Moore, Rhodes and Tyler estimate that from 1960 to 1976, if we take the calculation across from the four development areas to the other development areas, if we include the estimates from shipbuilding policies and include the multiplier effect that must be associated, regional policy between 1960 and 1976 has created some 540,000 jobs.
I understand why the right hon. Gentleman was anxious to misquote the facts and figures. However, if he accepts that the facts and figures that I have stated are the results of regional policy, how can he try to undermine that policy? How can he try to downgrade it as he has been trying to do in his statements?
If the right hon. Gentleman does not accept the Moore, Rhodes and Tyler estimates, let him accept the estimates that have come from the eighth report of the Expenditure Committee. The Committee


refers to the creation of 56,000 new jobs and the safeguarding of a further 35,000 jobs in 1976–77. Paragraph 15 states:
If this is achieved, at the past average outlay of £1,000–£1,200 per job, it will not make spectacular inroads into total unemployment".
Nobody is claiming that. The paragraph continues:
but it will be a modestly useful contribution and may perhaps be regarded as good value for money.
I hope that the right hon. Gentleman will accept that the Expenditure Committee is fairly independent and will accept its comments on the effects of regional policies.
If the right hon. Gentleman does not trust the Expenditure Committee—I hope that he will, because it went into the issue pretty thoroughly—I ask him to read his Department's annual report on the Industry Act. The right hon. Gentleman's Department is required to submit an annual report to Parliament under the 1972 legislation which the previous Conservative Administration introduced. The most recent report was printed in August 1978. His Department believes that between 1974 and 1978, as a result of section 7 and various regional policies administered under that legislation, there was a total of about 366,000 jobs either saved or created. However, the right hon. Gentleman still comes to the House to say that he does not have any real estimates of the number of jobs that might be created or might be lost.
If the right hon. Gentleman does not accept the evidence prepared by his Department—I hope that he will, because he has some good civil servants working for him—I ask him to accept the comments of the Industrial Development Advisory Board. As my hon. Friend the Member for Keighley (Mr. Cryer) has said, the board does not exactly have a Tribune Group majority on it. In page 17 of the annual report it is stated:
The Board welcomed this evidence of a growing level of employment-related investment in Assisted Areas; in particular, the fact that 54 of these projects were for the modernisation of existing facilities where employment would otherwise be jeopardised, showed an encouraging response to the availability of assistance to this type of investment.
That is precisely the type of investment that will be cut back under the policies that the right hon. Gentleman has announced.
Every industrial development board annual report and commentary gives testimony to the efficacy of section 7 policies in the regions. However, when my hon. Friend the Member for Thurrock asked the right hon. Gentleman at a recent Question Time what would become of the industrial development boards, it was evident from the expression on his face that he did not know that they existed. However, they have the responsibility of assessing projects for their viability. They speak volumes in praise of the policies that they have been asked to carry out under existing legislation and the efficacy of those policies in generating new employment.
The largest number of areas that we shall have in the category of assisted areas will be the intermediate areas. In view of the cutback in regional development grants, does the right hon. Gentleman think it is worth while having intermediate area status? Between 1972 and 1978, £137 million was given in regional development grants to intermediate areas. Even last year, for example, £32 million in regional development grants was given to intermediate areas. Under the policy, intermediate areas will receive no such grants.
However, the situation is more worrying than that. There will be an absence of regional development grants for building. The regional selective financial assistance for which those areas will compete will be much reduced. In terms of the percentage of the total offers and payments made, intermediate areas receive about one-quarter of the offers and a quarter of the payments made to all assisted areas. I quote rough figures. If the Minister disagrees, I hope that he will say so.
When the new areas with intermediate area status come into being there will be, according to the estimates that I have seen, only about £61 million in total for section 7 assistance. If the intermediate areas are to maintain their same portion—that is, one-quarter of all the offers and a quarter of the payments made under section 7—they will be talking in terms of section 7 assistance by the time that the map has been redrawn of a mere £15 million worth of regional selective financial assistance. Even that will be subjected to the enhanced criterion of additionality.
Whereas under regional development grants and the previous section 7 assistance intermediate areas received a grand total of about £50 million, by 1982–83 a much larger number of intermediate areas will compete for a much reduced total of £15 million. Formerly the figure was £50 million. In future it will be £15 million. Any area classified as intermediate will have a much reduced status. It will be much reduced in its ability to obtain the diminishing amount that will be available. There will be in fact a much bigger reduction than the Minister would have us believe.
Apart from the demotion of areas from intermediate area status to nothing, I am concerned about the downgrading of the regional effects of the National Enterprise Board, to which the Minister made vague allusions. He did not seem to realise that the National Enterprise Board, under the previous Government, was becoming an important instrument of regional policy. As a Minister in the previous Government, I received deputations and letters from Tory Members of Parliament and Tory-controlled local authorities because they wanted the Inmos production centres in their constituencies. They knew that the National Enterprise Board had 12 locations in Scotland, five in Wales, six in the Eastern region, 42 in the South-East, seven in the East Midlands, five in Yorkshire, 16 in the West Midlands and 20 in the North-West. Those figures show that under the previous Government the National Enterprise Board was starting to become—I accept that it could happen much quicker—a critical instrument of regional policy.
With the cutbacks to which the NEB will be subjected, it will not be able to carry out anything like the kind of regional role that it was starting to develop under the last Government. The right hon. Gentleman prefers to downgrade the activities and the role of the NEB, and he still does not tell us anything about the effect on inner city policies of raising the IDC limit.
In Greater London over the period from 1961 to 1971 there has been a loss of about 540,000 manufacturing jobs. How are we to be able to do anything about this, with any kind of inner city

policies, when throughout the South-East and throughout the West Midlands it will be very easy indeed to put up a plant, employing ultimately up to 600 people, and still stay below the new IDC limit?
The right hon. Gentleman, in raising the IDC limit, has totally undermined the effects of all the inner city work that the last Government had started to put into practice. If my hon. Friends who represent inner city areas of London, Birmingham, Manchester and Newcastle where hoping for anything under the last Government's inner city policies, they will know from what has been said so far by the Conservative Government that these policies will be very much undermined.
My right hon. Friend the Member for Deptford (Mr. Silkin) said that the next Labour Government would need to be more selective and more comprehensive in its approach. I can testify to that. I do not want to be caught again with the lack of powers to deal with one case after another. I want to be able to ensure that we can get the Vickers Scotswood investment in Newcastle. I want to be able to ensure that we can still have a rubber tyre manufacturing capacity in this country. I want to be able to ensure that we can have the capacity in this country to deal with the Chrysler type of case, where the Labour Government found that, in the face of a foreign multinational takeover, they did not have powers to deal with it.
I hope that the next Labour Government, on the basis of planning agreements, of extending their powers of selectivity, and enabling the NEB to take equity stakes in certain industries and expand its role, will ensure that we shall not simply have assisted areas, development grants, powers under section 7 and section 8, and so on. I hope that, through an extension of public ownership and of planning agreements, we can make our policy work on the ground.
The right hon. Gentleman seems to think that it all depends on entrepreneurs. I quote from a speech that he made to the Federation of Conservative Students at the Collegiate Theatre, London, on Saturday 30 October 1976. I am sure that he remembers it well. In that speech he said:
Our competitors abroad foster and encourage their entrepreneurs. They turn them loose upon the world like sleek, well-fed, but still hungry tigers.


I have met a few of them. I have had to deal with a few of them up and down the country and some of them have come to see me in deputations. If the right hon. Gentleman thinks that there are tigers in some of those cages waiting to be let out, I am sorry to tell him that when he actually comes face to face with reality he will find quite a few tired, old, shabby tabby cats. The Secretary of State's whole theory seems to be based upon the view that if we can turn entrepreneurs loose, in some weird way investment and jobs will appear. I am sorry to say that elsewhere in this country where that has been tried it certainly has not proved to be so.
When the right hon. Gentleman comes out with statements such as he has, telling us that we cannot save Peter without sacking Paul, and possibly Paul's assistant as well, and that several Peters go on the dole for every Paul kept in a protective job, I want to know how someone with a philosophy such as that can possibly support any kind of regional policy. What the Secretary of State has really said, and what he was trying to say in previous statements he made—including those he made to the House tonight—is that, according to his theory, it is completely illogical to have a subsidy of any kind because subsidies distort the kind of policy he wants to see carried out. I hope that the right hon. Gentleman will eventually have the courage to tell us that he does not believe in regional policy. Much of what he said seemed to underline that. The Act under which we have been administering this grant policy is the Industry Act 1972, which represented a dramatic U-turn for the Conservative Party. That Act was based on the Industrial Expansion Act 1968, which was enacted by a Labour Government.
The Prime Minister is a very determined lady. I certainly would not expect her to draw the Secretary of State's attention to the U-turn that had to take place in 1972. On behalf of my right hon. and hon. Friends whose constituencies are vitally affected, and on behalf of the country, I hope that the Prime Minister will ask the Secretary of State to read the history books to see what happened between 1970 and 1972 before it is too late.

9.37 p.m.

The Secretary of State for Scotland (Mr. George Younger): First, I should like to congratulate most warmly the three excellent maiden speakers we have had in the debate. My hon. Friend the Member for Oxford (Mr. Patten) made an impressive speech and will, I believe, be an admirable successor to his distinguished predecessors, some of whom he named, including my noble Friend the Lord Chancellor and, indeed, Mr. Evan Luard, whom he replaced. My hon. Friend the Member for Bristol, North-West (Mr. Colvin) made an extremely interesting speech, particularly raising the point about whether the right basis for a regional policy should be capital expenditure rather than employment. We shall look very carefully at what my hon. Friend so cogently said in his speech, but I think that the soundest way to support future investment is by capital investment, which usually produces sound and lasting jobs when investment is completed.
We also had a very forthright and most interesting speech from my hon. Friend the Member for Cornwall, North (Mr. Neale). No one who heard him can be in any doubt that he will be a most effective representative for his constituents in this Parliament.
We have had a most interesting evening and have heard the interesting advice of Opposition Members on the subject of regional policy. I found it particularly interesting because it seemed to me that, in a way that is becoming rather a pattern in this Parliament, a number of right hon. and hon. Gentlemen were suffering from severe bouts of amnesia, following 3 May.
Listening to the advice offered by the Opposition regarding all sorts of matters, such as spending money on various projects all over the country, one would hardly think that we were hearing advice from the very people who so ruined the economy of the country that there will be the gravest difficulty finding the money to keep many of the services going in the way we should like. I thought that some of the speeches were, in that context, very interesting.

Mr. Giles Radice: Mr. Giles Radice (Chester-le-Street) rose—

Hon. Members: Give way.

Mr. Younger: I am sorry, but I have very little time. The hon. Member for Nuneaton (Mr. Huckfield) made an interesting speech, but ate into my time. I should therefore like to continue.
The right hon. Member for Deptford (Mr. Silkin), who also made an interesting speech, does not seem to have got into his stride as Opposition spokesman on these matters. At least, I do not think that his hon. Friend the Member for Nuneaton quite appreciated what his right hon. Friend was on about. His description of his right hon. Friend's programmes was truly remarkable. Apparently, the new regional policy of the Labour Party, if ever it is again in Government, is to be both more selective and more comprehensive. That seems to be a marvellous prescription for hitting every target at once with the same bullet. I do not think that the hon. Gentleman did justice to what his right hon. Friend had in mind.
But even his right hon. Friend puzzled me. As I understood him, he made three suggestions. The first was that regional assistance ought not to be automatic but ought to be more selective. That seemed to be a suggestion that there should be less emphasis on regional development grants and more on selective assistance. I do not know whether that was what the right hon. Gentleman meant, but it is almost precisely what is involved in the changes that we are presently discussing. He also said something which must have amused many hon. Members on both sides of the House—that one of the keystones of the new regional policy was to be planning agreements. What a tremendous boost that will be. Planning agreements have been rolling around the rafters of this place for live years. I may not be well informed, but so far as I know only one planning agreement has been concluded, and that was with Chrysler. There may have been others. But if that is the right hon. Gentleman's solution to regional problems—a rate of one agreement in five years—it seems to be slightly slow progress. I hope that he will do better than that.
Under section 21 of the Industry Act 1975 anyone who signed a planning agreement would get regional development grants for all that he did in that area. But it is interesting that that carrot

has not been taken up by one firm during the time that it has been on the statute book. That is eloquent testimony to the hopelessness of that part of Labour's policy. Planning agreements as a policy are not lame ducks. Frankly, they are dead ducks, and it is time that the right hon. Gentleman recognised that.
Apart from the truly remarkable quotation that I have just given, the hon. Member for Nuneaton also said that every job lost was a real job. I wonder what he thinks of the doubling of unemployment during the period of the Labour Government. Were they all real jobs? I imagine that they were. I was also in some doubt as to whether he really understood what regional policy was all about.

Mr. Radice: Mr. Radice rose—

Mr. Younger: The hon. Member for Nuneaton kept saying that regional policy creates jobs. With great respect, regional policy may do many things, but it does not create jobs in itself; it shifts jobs. It makes jobs occur in places that they might not otherwise do. I shall return to that in a moment.

Mr. James Hamilton: Mr. James Hamilton (Bothwell) rose—

Mr. Younger: It is not true, as the right hon. Member for Deptford suggested, that only the cuts are important in these changes in regional policy and that there would be no significant improvement in coverage. For instance, the special development area in West Central Scotland has been significantly improved, bringing in a further 4 per cent. of manufacturing employees. This means that Scotland will now have 37 per cent. of the SDAs in the country, compared with 30 per cent, before. With respect to Labour Members, it is a pity that none of those who represent the area of that SDA said how pleased they were that it was getting a stronger pool of help.
The worst areas have been fully protected. For instance, West Central Scotland and Dundee retain SDA status, as do the five Scottish new towns. In Wales, Wrexham has been upgraded to a special development area, and we have undertaken to consider the situation of Shotton.

Mr. Gordon Wilson: Mr. Gordon Wilson (Dundee, East) rose—

Mr. Younger: The changes mean that 80 per cent.—

Mr. Wilson: Mr. Wilson rose—

Mr. Speaker: Order. It is clear that the Minister is not giving way, and he must be allowed to proceed.

Mr. John Silkin: Will the right hon. Gentleman give way?

Mr. Younger: I am sorry, but I do not have time.

Mr. Silkin: Will the right hon. Gentleman tell us how many—[Interruption.] The right hon. Gentleman and I have a private basis of discussion with one another. Will the right hon. Gentleman tell us how many development areas have risen to the status of special development area and how many have been downgraded?

Mr. Younger: All the information on that is published.

Mr. Cryer: Tell us in numbers.

Mr. John Silkin: Mr. John Silkin rose—

Hon. Members: Order.

Mr. Speaker: Order. We cannot have two right hon. Gentlemen addressing the House at the same time, and I think that the Minister is not giving way.

Mr. Gordon Wilson: Mr. Gordon Wilson rose—

Mr. Younger: The right hon. Gentleman—

Mr. John Silkin: Mr. John Silkin rose—

Hon. Members: Order.

Mr. Younger: I think it is generally agreed that it is my turn to speak now.

Mr. Silkin: Mr. Silkin rose—

Mr. Speaker: Order. Quite clearly, the Minister is not giving way.

Mr. Younger: I hope that the right hon. Gentleman will not treat me as though I were one of his ex-colleagues in the Common Market.
These changes mean that 80 per cent. of manufacturing employment in Scotland will remain within the development areas or special development areas, and the result of this relatively favourable position is that we estimate that the maxi-

mum saving likely to occur in Scotland by the end of the transitional period will be less than one-third, whereas in the rest of the United Kingdom, in the country as a whole, it is over one-third.
My right hon. Friend the Secretary of State for Industry promised that I would say something about the future of the Scottish and Welsh equivalents of the economic planning councils which have been mentioned. I shall fulfil that undertaking.
In Wales there is not an economic planning council, but my right hon. Friend has already announced in the House that he is considering the future of the Welsh Council, which has different functions, and he will be making a statement in due course to the House on that point.
As for the Scottish Economic Council, which is the equivalent in Scotland, that body is quite different from any of the English planning councils and the Welsh Council. It sits under the chairmanship of the Secretary of State. That distinguishes it from all the others. So there can be no question but that its views are listened to by the Minister concerned as he is present at its meetings. I have not yet met the council, but I look forward very much to doing so at its next meeting, which is planned for the autumn.

Mr. Gordon Wilson: Will the right hon. Gentleman give way?

Mr. Younger: No, I have no time. [HON. MEMBERS: "Give way."] No. I am sorry.

Mr. Radice: Mr. Radice rose—

Mr. Younger: No. My time, Mr. Speaker, has been eaten into a great deal. I shall not have time to answer any points unless I press on.
One thing that has stood out in the debate is that there is a considerable misunderstanding among right hon. and hon. Members about what regional policy is really all about. It is not about the general stimulation of the economy or specific aids to particular industries as such. There are many ways of doing that, and the present Government have already embarked on some of them. For instance, cutting personal taxation removes a dead hand from the incentive of both workers and management and will


open up a new spirit of enterprise leading to higher productivity and the creation of new jobs. Then there is the removal of administrative and legislative burdens from small businesses. If we introduce safeguards against unfair competition from direct labour departments, ease company law and unfair employment legislation, we can release much energy and drive among small businesses, which I believe can have a dramatic effect on the sagging industrial performance which has been the hallmark and is the lasting legacy which the Labour Party has left to the British economy.
If each one of these small firms were to take on only one extra person, our unemployment problems would be very largely dealt with.
All this is very desirable and necessary, but it is nothing to do with regional policy as such. Regional policy is not about the general stimulation of the economy. It is about the placing of special aids in areas of special difficulty. Judged against these criteria, regional policy has achieved a measure of success in many parts of the country, as my right hon. Friend the Secretary of State said earlier.
Perhaps I may take one or two examples. The overall level of unemployment in Scotland that at times in the past approached twice that of the United Kingdom has in recent years been only about one-third greater, and that still represents a serious problem that we have to tackle. On any analysis, however, it is a measurable improvement. Levels of income and output that for many years lagged seriously behind the United Kingdom have caught up. There has been new investment, much of it from overseas, and these companies have in many cases prospered.
As a result, we must face the fact that the position has been reached where some parts of the country can simply no longer justify maintenance of the regional aid that they have had in the past. That leaves us to concentrate the available resources on those areas where performance has not improved and which continue to need help. Against that background, it is absurd that we have allowed regional assistance to cover as much as 40 per cent. of the population area of Great Britain. Nobody can say that coverage

like that is concentrating aid. Moreover, the reluctance of the Labour Government to make changes in regional policy has left many anomalies, many of which have been mentioned today by right hon. and hon. Gentlemen.
Many unassisted areas have higher levels of unemployment than areas that receive regional aid, and the reverse is also true. Unemployment levels are not the only criterion for deciding development area status but they are an important factor. There can be little doubt that the Labour Government, by their failure to face up to the anomalies that have become increasingly absurd, have damaged confidence in regional policy in many areas.

Mr. Robert C. Brown: Mr. Robert C. Brown rose—

Mr. Spencer: Order. It is clear that the Minister is not giving way.

Mr. Younger: It is always a sure sign when Labour Members get to the stage that they do not want to hear what is being said that they know when they are on a bad point.

Mr. Robert C. Brown: On a point of order, Mr. Speaker. Will the right hon. Gentleman withdraw the statement that he has just made? I have been sitting here throughout the debate.

Mr. Younger: I apologise if I have offended the hon. Gentleman but I thought that I was saying something that was self-evident. If one wishes to hear what a speaker is saying, it does not help to shout. Perhaps that is too complicated a concept for Labour Members.
It makes total sense to concentrate regional aid on areas with the greatest need. That is precisely what the change of policy does. It concentrates help in about 25 per cent. of the population area of Britain where the need is greatest. A prime example of that is the redefinition of the boundaries of SDAs. A number of areas in England, Wales and Scotland are being downgraded and new SDAs are to be created at, for example, Wrexham, in the South-West of England and in West Central Scotland. Development area status has similarly been adjusted with important upgradings for places like Wigan, Rotherham, Plymouth and Rhyl.
Understandably, concern has been expressed during the debate about areas whose status is being downgraded. Here I must emphasise the generous nature of the transitional arrangements that the Government are making. No area will lose its assisted area status for three years, and before that happens there will be a further review. The various aids now in payment will continue to be available for one year at their present levels so that transition can be as gradual as possible. That contrasts sharply with the experience of industry in the assisted regions when the previous Government decided to end regional employment premiums. That removed £216 million from the economy almost literally over-night.

Mr. Harry Ewing: Will the right hon. Gentleman give way?

Mr. Younger: No. That cut—

Mr. Ewing: Will the Secretary of State give way?

Mr. Speaker: Order. It is clear that the Minister is not giving way.

Mr. Ewing: Will the right hon. Gentleman give way?

Mr. Younger: No. I always trust the—

Mr. Ewing: Give way.

Mr. Speaker: Order. I appeal to the House. It has been made clear that the Minister is not giving way. He has the Floor. He has been called to speak and he is entitled to be heard.

Mr. Younger: I think that—

Mr. Ewing: Mr. Ewing rose—

Mr. Speaker: Order. I must request the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) not to try to intervene again.

Mr. Younger: The hon. Gentleman must be frustrated at not being able to address the House. The Labour Party criticises us for our change in regional policy, but the previous Labour Government's withdrawal of REP removed £216 million from the economy almost literally overnight.

Mr. Ewing: Will the right hon. Gentleman give way on that point?

Mr. Younger: No. There was no safe-guard in the previous Government's action for special development areas. The cut in Scotland was £79 million, which is well over twice as much in real terms as the £45 million which we estimate to be the maximum likely saving in Scotland in 1982–83 as a result of our policy changes.
While the regional debate is raging and Labour Members are criticising a sensible and practical move to ensure that regional aid is better concentrated in the areas that need it greatest, events outside have moved on. The answer to the criticisms of Labour Members—

Mr. Ewing: On a point of order, Mr. Speaker. Is it in order for the Secretary of State to mislead the House by quoting figures about the withdrawal of REP without saying that the premium was replaced by the temporary employment subsidy, which—

Mr. Speaker: Order. The hon. Gentleman knows that he is advancing an argument.

Mr. Younger: I was being exceptionally kind to the hon. Gentleman because I did not update the figures to take account of inflation as I could have done.
Yesterday we had the announcement that answers the criticisms of Labour Members. The major new development in Greenock of National Semiconductors will produce 1,300 new jobs in a critical area of high unemployment. If that firm had been as doubtful as are Labour Members about the effectiveness of regional policy, it would not have fulfilled its undertaking to come here. That is the answer to Labour Members and that is why I believe that the country will see that we have made a sensible change and a long overdue improvement in the distribution of regional aid.

Mr. James Hamilton: Will the right hon. Gentleman give way?

Mr. Younger: No. This is a subject which affects many hon. Members and their constituencies. I should like to have answered many of the detailed points put by a number of hon. Members. I undertake to write to those hon. Members with the answers to their questions.

Mr. Cyril Smith: This is a disgraceful speech.

Mr. Younger: I hope that the hon. Member for Rochdale (Mr. Smith) will accept that I would willingly have answered his questions if other hon. Members had not interrupted so much.
Our change in regional policy is overdue. It was courageous of the Govern-

ment to decide to concentrate aid where it is most needed. If the Labour Government had had the courage to do so some time ago, there might have been a great deal less unemployment than that which they left behind.

Question put, That the amendment be made:—

The House divided: Ayes 256, Noes 317.

Division No. 78]
AYES
[10.00 p.m.


Abse, Leo
Eastham, Ken
Lewis, Ron (Carlisle)


Adams, Allen
Edwards, Robert (Wolv SE)
Lofthouse, Geoffrey


Allaun, Frank
Ellis, Raymond (NE Derbyshire)
Lyon, Alexander (York)


Alton, David
Ellis, Tom (Wrexham)
Lyons, Edward (Bradford West)


Anderson, Donald
English, Michael
Mabon, Rt Hon Dr J Dickson


Archer, Rt Hon Peter
Ennals, Rt Hon David
McCartney, Hugh


Armstrong, Ernest
Evans, loan (Aberdare)
McDonald, Dr Oonagh


Ashton, Joe
Ewing, Harry
McElhone, Frank


Atkinson, Norman (H'gey, Tott'ham)
Faulds, Andrew
McKay, Allen (Penistone)


Bagier, Gordon A. T.
Field, Frank
MacKenzle, Rt Hon Gregor


Barnett, Guy (Greenwich)
Fitt, Gerard
Maclennan, Robert


Barnett, Rt Hon Joel (Heywood)
Flannery, Martin
McMillan, Tom (Glasgow, Central)


Beith, A. J.
Fletcher, L. R. (Ilkeston)
McNally, Thomas


Benn, Rt Hon Anthony Wedgwood
Fletcher, Ted (Darlington)
McNamara, Kevin


Bennett, Andrew (Stockport N)
Foot, Rt Hon Michael
Magee, Bryan


Bidwell, Sydney
Ford, Ben
Marks, Kenneth


Booth, Rt Hon Albert
Forrester, John
Marshall, David (Gl'sgow,Shettles'n)


Boothroyd, Miss Betty
Foulkes, George
Marshall, Dr Edmund (Goole)


Bottomley, Rt Hon Arthur (M'brough)
Fraser, John (Lambeth, Norwood)
Marshall, Jim (Leicester South)


Bradley, Tom
Freeson, Rt Hon Reginald
Martin, Michael (Gl'gow, Springb'n)


Brown, Hugh D. (Provan)
Freud, Clement
Mason, Rt Hon Roy


Brown, Robert C. (Newcastle W)
Garrett, John (Norwich S)
Maxton, John


Brown, Ronald W. (Hackney S)
Garrett, W. E. (Wallsend)
Maynard, Miss Joan


Brown, Ron (Edinburgh, Leith)
George, Bruce
Meacher, Michael


Buchan, Norman
Gilbert, Rt Hon Dr John
Mellish, Rt Hon Robert


Callaghan, Rt Hon J. (Cardiff SE)
Ginsburg, David
Mikardo, Ian


Callaghan, Jim (Middleton &amp; P)
Golding, John
Millan, Rt Hon Bruce


Campbell-Savours, Dale
Gourlay, Harry
Miller, Dr M S (East Kilbride)


Cant, R. B.
Graham, Ted
Mitchell, Austin (Grimsby)


Carmichael, Neil
Grant, George (Morpeth)
Mitchell, R. C. (Soton, Itchen)


Carter-Jones, Lewis
Grant, John (Islington C)
Morris, Rt Hon Alfred (Wythenshawe)


Cartwright, John
Grimond, Rt Hon J.
Morris, Rt Hon Charles (Openshaw)


Clark, David (South Shields)
Hamilton, W. W. (Central Fife)
Morris, Rt Hon John (Aberavon)


Cocks, Rt Hon Michael (Bristol S)
Hardy, Peter
Morton, George


Cohen, Stanley
Harrison, Rt Hon Walter
Moyle, Rt Hon Roland


Coleman, Donald
Hart, Rt Hon Judith
Mulley, Rt Hon Frederick


Concannon, Rt Hon J. D.
Haynes, David
Newens, Stanley


Conlan, Bernard
Healey, Rt. Hon Denis
Oakes, Gordon


Cook, Robin F.
Heffer, Eric S.
Ogden, Eric


Cowans, Harry
Hogg, Norman (E Dunbartonshire)
O'Halloran, Michael


Cox, Tom (Wandsworth, Tooting)
Holland, Stuart (L'beth, Vauxhall)
O' Neill, Martin


Craigen, J. M. (Glasgow, Maryhill)
Home Robertson John
Orme, Rt Hon Stanley


Crowther, J. S.
Homewood, William
Palmer, Arthur


Cryer, Bob
Hooley, Frank
Park, George




Parker, John


Cunliffe, Lawrence
Horam, John
Parry, Robert


Cunningham, George (Islington S)
Howell, Rt Hon Denis (B'ham, Sm H)



Cunningham, Dr John (Whltehavan)
Huckfield, Les
Pendry, Tom


Dalyell, Tam

Penhaligon, David


Davidson, Arthur
Hughes, Mark (Durham)
Powell, Raymond (Ogmore)


Davies, Rt Hon Denzil (Llanelli)
Hughes, Robert (Aberdeen North)
Prescott, John


Davies, E. Hudson (Caerphilly)
Janner, Hon Gieville
Price, Christopher (Lewisham West)


Davies, Ifor (Gower)
Jay, Rt Hon Douglas
Race, Reg


Davis, Clinton (Hackney Central)
John, Brynmor
Radice, Giles


Davis, Terry (B'rm'ham, Stechford)
Johnson, James (Hull West)
Rees, Rt Hon Merlyn (Leeds South)


Deakins, Eric
Johnson, Walter (Derby South)
Richardson, Miss Jo


Dean, Joseph (Leeds West)
Johnston, Russell (Inverness)
Roberts, Albert (Normanton)


Dempsey, James
Jones, Alec (Rhondda)
Roberts, Ernest (Hackney North)


Dixon, Donald
Jones, Dan (Burnley)
Roberts, Gwilym (Cannock)


Dobson, Frank
Kiroy-Silk, Robert
Robertson, George


Dormand, J. D.
Kinnock, Nell
Robinson, Geoffrey (Coventry NW)


Douglas-Mann, Bruce
Lambie, David
Rodgers, Rt Hon William


Dubs, Alfred
La inborn, Harry
Rooker, J. W.


Duffy, A. E. P.
Lamond, James
Roper, John


Dunn, James A. (Liverpool, Kirkdale)
Leadbitter, Ted
Ross, Ernest (Dundee West)


Dunnett, Jack
Leighton, Ronald
Ross, Stephen (Isle of Wight)


Dunwoody, Mrs Gwyneth
Lestor, Miss Joan (Eton &amp; Slough)
Rowlands, Ted


Eadie, Alex
Lewis, Arthur (Newham North West)
Ryman, John




Sandelson, Neville
Strang, Gavin
White, Frank R. (Bury &amp; Radcliffe)


Sever, John
Straw, Jack
Whitehead, Phillip


Sheerman, Barry
Summerskill, Hon Dr Shirley
Whitlock, William


Sheldon, Rt Hon Robert (A'ton-u-L)
Taylor, Mrs Ann (Bolton West)
Wigley, Dafydd


Shore, Rt Hon Peter (Step and Pop)
Thomas, Dafydd (Merioneth)
Willey, Rt Hon Frederick


Short, Mrs. Renée
Thomas, Jeffrey (Abertillery)
Williams, Rt Hon Alan (Swansea W)


Silkin, Rt Hon John (Deptford)
Thomas, Mike (Newcastle East)
Williams, Sir Thomas (Warrington)


Silkin, Rt Hon S. C. (Dulwich)
Thomas, Dr Roger (Carmarthen)
Wilson, Gordon (Dundee East)


Silverman, Julius
Thorne, Stan (Preston South)
Wilson, Rt Hon Sir Harold (Huyton)


Skinner, Dennis
Tilley, John
Wilson, William (Coventry SE)


Smith, Cyril (Rochdale)
Tinn, James
Winnick, David


Smith, Rt Hon J. (North Lanarkshire)
Torney, Tom
Woodall, Alec


Snape, Peter
Urwin, Rt Hon Tom
Woolmer, Kenneth


Soley, Clive
Varley, Rt Hon Eric G.
Wrigglesworth, Ian


Spriggs, Leslie
Wainwright, Edwin (Dearne Valley)
Wright, Miss Sheila


Stallard, A. W.
Wainwright, Richard (Colne Valley)
Young, David (Bolton East)


Steel, Rt Hon David
Walker, Harold (Doncaster)



Stewart, Rt Hon Donald (W Isles)
Weetch, Ken
TELLERS FOR THE AYES:


Stoddart, David
Wellbeloved, James
Mr. James Hamilton and


Stott, Roger
Welsh, Michael
Mr. John Evans.




NOES


Adley, Robert
Cormack, Patrick
Hannam, John


Aitken, Jonathan
Corrie, John
Haselhurst, Alan


Alexander, Richard
Costain, A. P.
Hastings, Stephen


Alison, Michael
Cranborne, Viscount
Havers, Rt Hon Sir Michael


Amery, Rt Hon Julian
Critchley, Julian
Hawkins, Paul


Ancram, Michael
Crouch, David
Hawksley, Warren


Arnold, Tom
Dean, Paul (North Somerset)
Hayhoe, Barney


Aspinwall, Jack
Dickens, Geoffrey
Heath, Rt Hon Edward


Atkins, Rt Hon H. (Spelthorne)
Dodsworth, Geoffrey
Heddle, John


Atkins, Robert (Preston North)
Dorrell, Stephen
Henderson, Barry


Atkinson, David (B'mouth East)
Douglas-Hamilton, Lord James
Heseltine, Rt Hon Michael


Baker, Kenneth (St. Marylebone)
Dover, Denshore
Hicks, Robert


Baker, Nicholas (North Dorset)
du Cann, Rt Hon Edward
Higgins, Terence L.


Banks, Robert
Dunn, Robert (Dartford)
Hill, James


Beaumont-Dark, Anthony 
Durant, Tony
Hogg, Hon Douglas (Grantham)


Bell, Ronald
Dykes, Hugh
Holland, Philip (Carlton)


Bendall, Vivian
Eden, Rt Hon Sir John
Hordern, Peter


Benyon, Thomas (Abingdon)
Edwards, Rt Hon N. (Pembroke)
Howell, Rt Hon David (Guildford)


Benyon, W. (Buckingham)
Eggar, Timothy
Howell, Ralph (North Norfolk)


Best, Keith
Elliott, Sir William
Hunt, David (Wirral)


Bevan, David Gilroy
Emery, Peter
Hunt, John (Ravensbourne)


Biffen, Rt Hon John
Eyre, Reginald
Hurd, Hon Douglas


Biggs-Davison, John
Fairbairn, Nicholas
Irving, Charles (Cheltenham)


Blackburn, John
Fairgrieve, Russell
Jenkin, Rt Hon Patrick


Blaker, Peter
Faith, Mrs. Sheila
Jessel, Toby


Body, Richard
Farr, John
Johnson Smith, Geoffrey


Bonsor, Sir Nicholas
Fell, Anthony
Jopling, Rt Hon. Michael


Boscawen, Hon Robert
Fenner, Mrs. Peggy
Joseph, Rt Hon Sir Keith


Bottomley, Peter (Woolwich West)
Finsberg, Geoffrey
Kaberry, Sir Donald


Bowden, Andrew
Fisher, Sir Nigel
Kellett-Bowman, Mrs Elaine


Boyson, Dr Rhodes
Fletcher, Alexander (Edinburgh N)
Kershaw, Anthony


Braine, Sir Bernard
Fletcher-Cooke, Charles
Kilfedder, James A.


Bright, Graham
Fookes, Miss Janet
Kimball, Marcus


Brinton, Timothy
Forman, Nigel
King, Rt Hon Tom


Brocklebank-Fowler, Christopher
Fox, Marcus
Kitson, Sir Timothy


Brooke, Hon Peter
Fraser, Rt non H. (Stafford &amp; St
Knight, Mrs Jill


Brown, Michael (Brigg &amp; Sc'thorpe)
Fraser, Peter (South Angus)
Knox, David


Browne, John (Winchester)
Fry, Peter Galbraith, Hon T.G.D
Lamont, Norman


Bruce-Gardyne, John
Gardiner, George (Reigate)
Lang, Ian


Bryan, Sir Paul
Gardner, Edward (South Fylde)
Langford-Holt, Sir John


Buchanan-Smith, Hon Alick
Garel-Jones, Tristan
Lawrence, Ivan


Buck, Antony

Lawson, Nigel


Budgen, Nick
Glyn, Dr Alan
Lennox-Boyd, Hon Mark


Bulmer, Esmond
Goodhart, Philip
Lester, Jim (Beeston)


Butcher, John
Goodhew, Victor
Lewis, Kenneth (Rutland)


Butler, Hon Adam
Goodlad, Alastair
Lloyd, Ian (Havant &amp; Waterloo)


Cadbury, Jocelyn
Gorst, John
Lloyd, Peter (Fareham)


Carlisle, John (Luton West)
Gow, Ian
Loveridge, John


Carlisle, Kenneth (Lincoln)
Gower, Sir Raymond
Luce, Richard


Carlisle, Rt Hon Mark (Runcorn)
Grant, Anthony (Harrow C)
Lyell, Nicholas


Chalker, Mrs. Lynda
Gray, Hamish
McAdden, Sir Stephen


Channon, Paul
Greenway, Harry
McCrindle, Robert


Chapman, Sydney
Grieve, Percy
Macfarlane, Nell


Churchill, W. S.
Griffiths, Eldon (Bury St Edmunds)
MacGregor, John


Clark, Hon Alan (Plymouth, Sutton)
Griffiths, Peter (Portsmouth N)
Mackay, John (Argyll)


Clark, William (Croydon South)
Grist, Ian
Macmillan, Rt Hon M. (Farnham)


Clarke, Kenneth (Rushcliffe)
Grylls, Michael
McNair-Wilson, Michael (Newbury)


Clegg, Walter
Gummer, John Selwyn
McNair-Wilson, Patrick (New Forest)


Cockeram, Eric
Hamilton, Hon Archie (Eps'm&amp;Ew'll)
McQuarrie, Albert


Colvin, Michael
Hamilton, Michael (Salisbury)
Madel, David


Cope, John
Hampson, Dr. Keith
Major, John







Marland, Paul
Pink, R. Bonner
Stokes, John


Marlow, Antony
Pollock, Alexander
Stradling Thomas J.


Marshall, Michael (Arundel)
Porter, George
Tapsell, Peter


Marten, Neil (Banbury)
Prentice, Rt Hon Reg
Taylor, Robert (Croydon NW)


Mates, Michael
Price, David (Eastleigh)
Tebbit, Norman


Mather, Carol
Prior, Rt Hon James
Temple-Morris, Peter


Maude, Rt Hon Angus
Proctor, K. Harvey
Thatcher, Rt Hon Mrs Margaret


Mawby, Ray
Pym, Rt Hon Francis
Thompson, Donald


Mawhinney, Dr Brian
Rathbone, Tim
Thorne, Neil (Ilford South)


Maxwell-Hyslop, Robin
Rees, Peter (Dover and Deal)
Thornton, George


Mayhew, Patrick
Rees-Davies, W. R.
Townend, John (Bridlington)


Mellor, David
Renton, Tim
Townsend, Cyril D. (Bexleyheath)


Meyer, Sir Anthony
Rhodes James, Robert
Trippier, David


Miller, Hal (Bromsgrove &amp; Redditch)
Rhys Williams, Sir Brandon
Trotter, Neville


Mills, Iain (Meriden)
Ridsdale, Julian
van Straubenzee, W. R.


Mills, Peter (West Devon)
Rifkind, Malcolm
Vaughan, Dr Gerard


Miscampbell, Norman
Rippon, Rt Hon Geoffrey
Viggers, Peter


Mitchell, David (Basingstoke)
Roberts, Michael (Cardiff NW)
Waddington, David


Moate, Roger
Rost, Peter
Wakeham, John


Monro, Hector
Royle, Sir Anthony
Waldegrave, Hon William


Montgomery, Fergus
Sainsbury, Hon Timothy
Walker, Rt Hon Peter (Worcester)


Moore, John
St. John-Stevas, Rt Hon Norman
Walker, Bill (Perth &amp; E Perthshire)


Morris, Michael (Northampton, Sth)
Scott, Nicholas
Walker-Smith, Rt Hon Sir Derek


Morrison, Hon Charles (Devizes)
Shaw, Michael (Scarborough)
Wall, Patrick


Morrison, Hon Peter (City of Chester)
Shelton, William (Streatham)
Waller, Gary


Murphy, Christopher
Shepherd, Colin (Hereford)
Walters, Dennis


Myles, David
Shepherd, Richard (Aldridge-Br'hills)
Ward, John


Neale, Gerrard
Shersby, Michael
Warren, Kenneth


Needham, Richard
Silvester, Fred
Watson, John


Nelson, Anthony
Sims, Roger
Wells, John (Maidstone)


Neubert, Michael
Skeet, T. H. H.
Wells, P. Bowen (Hert'fd&amp;Stev'nage)


Newton, Tony
Smith, Dudley (War. and Leam'ton)
Wheeler, John


Normanton, Tom
Speed, Keith
Whitelaw, Rt Hon William


Nott, Rt Hon John
Speller, Tony
Whitney, Raymond


Onslow, Cranley
Spence, John
Wickenden, Keith


Oppenheim, Rt Hon Mrs Sally
Spicer, Jim (West Dorset)
Wiggin, Jerry


Osborn, John
Spicer, Michael (S Worcestershire)
Wilkinson, John


Page, John (Harrow, West)
Sproat, Iain
Winterton, Nicholas


Page, Rt Hon R. Graham (Crosby)
Squire, Robin
Wolfson, Mark


Parris, Matthew
Stainton, Keith
Young, Sir George (Acton)


Patten, Christopher (Bath)
Stanbrook, Ivor
Younger, Rt Hon George


Patten, John (Oxford)
Stanley, John



Pattie, Geoffrey
Steen, Anthony
TELLERS FOR THE NOES:


Pawsey, James
Steward, Ian (Hitchin)
Mr. Spencer le Marchant and


Percival, Sir Ian
Stewart, John (East Renfrewshire)
Mr. Anthony Berry.


Peyton, Rt Hon John

Question accordingly negatived.

Main Question put and agreed to.

Resolved,
That this House welcomes the changes which are being introduced by the Government in regional policy in order to concentrate assistance on areas most in need, to make it more cost effective, and to remove anomalies in Assisted Area gradings.

BUSINESS OF THE HOUSE

10.14 p.m.

The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): On

a point of order, Mr. Speaker. With permission, I wish to inform the House that the draft Regional Development Grants (Variation of Prescribed Percentages) Order will not be moved this evening. A revised draft as proposed by the Joint Committee on Statutory Instruments has been laid tonight, and it will be debated tomorrow.

Mr. Michael Foot: Further to that point or order, Mr. Speaker. I thank the right hon. Gentleman for his statement. Does he think that there is an outside chance that the Government will have got it right tomorrow?

EMPLOYMENT PROTECTION

10.16 p.m.

Mr. Speaker: Mr. Patrick Mayhew.

Hon. Members: Where is he?

Mr. Speaker: Anyone can move the order.

Mr. Spencer Le Marchant (Comptroller of Her Majesty's Household): Mr. Spencer Le Marchant (Comptroller of Her Majesty's Household) rose—

Hon. Members: Resign.

Mr. Michael Foot: On a point of order, Mr. Speaker. If there is no Minister here, I do not think it is possible to proceed with the business. I should have thought that the best course would be for the House to adjourn.

Mr. Speaker: Order. I called the Minister, but any Minister is able to move the order.

Mr. Le Marchant: I beg to move.

Hon. Members: Resign.

Mr. Speaker: The Question is—[Interruption.] Order. I will formally propose the Question—

10.18 p.m.

The Secretary of State for Employment (Mr. James Prior): Unaccustomed as I am to having this great audience on such an order, I beg to move,
That the draft Employment Protection (Handling of Redundancies) Variation Order 1979, which was laid before this House on 10 July, be approved.
This order reduces the time for notifications of redundancies for firms where there is a redundancy of 100 people or less, between 10 and 100 to 30 days instead of 90 days. [Interruption.] As hon. Members will realise, this is a very important order and one that should be discussed seriously in the House. That is what I am intending to do and what I am prepared to do. The sort of response that we are getting from the Opposition does not improve the situation.

Mr. Ernie Roberts: On a point of order, Mr. Speaker. May I ask the right hon. Gentleman—

Mr. Speaker: Order. The hon. Gentleman is able only to raise a point of order with me.

Mr. Prior: I refer to the purpose of the order. Under sections 99 and 100, two things are required of the employer: first, consultation with the appropriate recognised unions, and, secondly, notification of the proposal to the Secretary of State for Employment.

Mr. Norman Atkinson: On a point of order, Mr. Speaker.

Mr. Prior: I thought that hon. Members wanted to listen.

Mr. Atkinson: The Minister is quoting the wrong order. He is talking about 90 days when he should be referring to 60 days.

Mr. Speaker: The Minister is responsible for his own speech. I am not responsible.

Mr. Bob Cryer: The Secretary of State should apologise for not being here earlier.

Mr. Prior: The hon. Member for Tottenham (Mr. Atkinson) should listen. We are dealing with the order about redundancy, not unfair dismissal. That is what I have been talking about.
The purpose of the requirements is sensible. Consultation is required so that the union can discuss the employer's plans to see whether there are ways of reducing redundancies or mitigating their effects.
Notification is required so that the Manpower Services Commission—[HON. MEMBERS: "Apologise."] I thought that hon. Members were interested in this subject. Just because they think that they have caught out the Government, they are not prepared to listen to the arguments. They do not even know which order we are discussing.

Mr. Cryer: Apologise.

Mr. Prior: I suggest that hon. Members listen.

Mr. Speaker: Order. There is no need for the House to be as excited as this. We must hear the Minister, and then there will be an opportunity for a reply.

Mr. Harry Ewing: On a point of order, Mr. Speaker. This subject affects human


beings. It should not be treated in the cavalier manner in which the Secretary of State and his junior Minister have treated it.

Mr. Speaker: The Secretary of State is moving the order. Afterwards I presume that an Opposition Front Bench spokesman will wish to reply.

Mr. Prior: I am being asked from seated positions to apologise to the House. I always apologise to the House if I believe that it is necessary—as I do in this case. I was not in my place at the right time, but I am now trying to make a sensible and reasonable speech about an important matter to which I hope the House will listen.

Mr. James Callaghan: I am grateful to the Secretary of State for saying that he apologises to the House. He would have had a better hearing if he had not come into the Chamber in such a brazen and contemptible way. [HON. MEMBERS: "Hear, hear."] I do not know what the Secretary of State thinks is so funny about not being in his place, coming into the Chamber without any notes, reading the order to us and then gracelessly apologising.
He had better behave in the House as hon. Members expect him to behave. [HON. MEMBERS: "Sit down."] I warn Government Members that they had better keep quiet. It is the duty of Government Members to keep quiet and to take it. [HON. MEMBERS: "Sit down."] The sooner they learn that, the more likely they are to get their business through and to have their mistakes forgiven. If they go on making mistakes at the rate that they made them in the last week, they will not get any business through.

Mr. Prior: The Leader of the Opposition has been in the House long enough to know that these things happen. Many of us were under the impression that there was to be another order to be debated first. We were standing outside waiting to come into the Chamber.
Most reasonable and honourable Gentlemen will accept that as a full explanation of what happened. Instead of trying to create as much of a row as possible, hon. Members should discuss the two important orders with the seriousness which

they deserve. Now that the right hon. Gentleman has had his say on the matter, I hope that he and his right hon. and hon. Friends will attend to the debate and will react accordingly. As I have already said—

Mr. Norman Atkinson: The Secretary of State was quick to try to correct my point of order, but when he began to speak about the two orders to which he has now referred he was speaking about the 90 days and their substitution. What he should be talking about on the orders is either 26 weeks or 60 days. Now will he have the grace to admit to the House that he was wrong in talking about 90 days?

Mr. Prior: On the contrary. The hon. Gentleman is totally wrong. He has not got the order right. I am talking about the order which deals with redundancies, and he ought to listen to what I say. If he had done that, perhaps he would owe me an apology, as would some of his hon. Friends, too.
May I now continue my speech? The Act lays down certain time limits affecting consultation, and it is these and the effecting of notification that the order is about. The Act provides that consultation must start at the earliest opportunity, and there is no change there, but for medium-scale redundancies, where between 10 and 99 people are made redundant within 30 days or less, the Act goes on to provide that the employer must begin the consultation process at least 60 days before the first dismissal is due to take place. Where the number whom the employer proposes to make redundant is 100 or more, the employer must allow 90 days for the consultation process before the first dismissal takes effect. Where the number is under 10, no specific time lapse after the beginning of consultation is laid down.
I turn now to notification. The pattern here is the same. For proposed redundancies of 10 to 99, 60 days must elapse between the date of notification and the date when the first dismissal takes effect. Where the number is 100 or more, it is 90 days. Where fewer than 10 are to be made redundant, there is no obligation to notify the Secretary of State.
What all this adds up to is that, under the present law, when an employer finds that he has to lay off employees, perhaps


because business has suddenly turned down, he may, if the numbers are between 10 and 99, be required to keep them all on his payroll for a maximum of 60 days after he has begun to consult the union and for a maximum of 60 days after he has notified the Secretary of State.
The Government believe that length of time to be damagingly onerous for small businesses in particular, and by the order we propose in each instance to reduce the period to 30 days.
The 90-day rule for large-scale redundancies we leave untouched. However, the 60-day rule is deterring smaller businesses in significant numbers from creating more jobs and taking on more workers. The reason is simple. As they have frequently complained, smaller business men often cannot fulfil their present obligations. They cannot afford to keep people on their payroll for 60 days after it has become plain that they must become redundant.
For many small businesses visibility does not stretch ahead as far as 60 days. It is to the small businesses that we must look in the main if jobs are to be created in future. The consequence is that small firms are driven either to delay redundancies at heavy financial cost or to introduce redundancies without the proper notice. When the latter course is taken, a union may complain to an industrial tribunal and an employer may find that a protective award has been made against him, which may amount to remuneration of up to 60 days. The order will reduce the maximum to 30 days.
It is true that an employer may claim to excuse himself by showing that there were special circumstances, but that means making representations to the industrial tribunal. The burden of proof is on the employer. Parliament has not made these problems crystal clear for the layman or even for the lawyer. In the present circumstances I doubt whether I am making them plain to the House.
On account of the effect of the present time limits on employment, there is a strong case for reducing the limits affecting medium-scale redundancies. That will principally be proposed by small business. However, their reduction would not be justified if it led to proper consultation

with the unions not being possible, or to the placing and training services of the Manpower Services Commission not being able to be brought adequately to bear.
We have considered these matters carefully. We are satisfied that neither result would come about if such a measure were implemented. I am advised that within the reduced time scale the Manpower Services Commission will be able to provide its services as effectively and helpfully as at present. As for consultation, we are fortified by the knowledge that 30 days will still be within the requirement of the EEC directive on collective redundancies and will not put us out of step with other European countries. Furthermore, it is a change that the Labour Government specifically envisaged. In section 106 they provided that 30 days is the shortest delaying period that may be introduced by amending order.

Mr. Ted Leadbitter: The right hon. Gentleman has made it clear that in his view there is an economic case for the assumptions that he is making. However, he has not made out that case. Will he tell the House what consultations he had with the trade union movement before introducing the order? What consultations has he had with the CBI? What conclusions has he drawn from the comments that have been made to him?

Mr. Prior: I am grateful to the hon. Gentleman for making that intervention. I believe that one of the effects of employment protection legislation over the past few years has been to deter a number of businesses, especially small businesses, from employing additional labour. Therefore, we in the House have a duty at a time of high unemployment to do all that we can to reduce those number of matters that in the eyes of small employers deter them from taking on additional labour. On that basis we consulted a wide range of institutions and people before coming to a decision.
The hon. Gentleman asks me whether the Government have consulted the TUC and the CBI. The answer is that we have consulted much wider than merely the TUC and the CBI. The TUC, unfortunately, felt that no change should be made. The CBI and nearly all the other interests that we consulted took the view that we were quite right to make the change. I can assure the hon. Gentleman that there


has been widespread consultation on a personal basis and as a result of letters that we have sent to a number of interested parties.
I can be no more certain than Labour Members that what we are doing will help small businesses, especially to employ more people. All I know is that employment protection legislation as it now operates is considered by many small employers and other employers to be a deterrent to taking on additional labour. I also know that the 90-day rule has not been adhered to as strictly as it should have been. There have been numerous cases where the 90-day rule has been broken. It is not unreasonable that 30 days should, in these cases, be the time for notice. If the 90-day rule has not been adhered to, and if it is more reasonable to have 30 days than 90 days, it should help the psychology of small businesses to reduce it from 90 days to 30 days. That is the main point of the remarks that I wish to make.
We art not talking here about a specific point. We are talking about trying to create an atmosphere in which small business, and the Employment Protection Act in its main parts, may operate without the psychological effect of people, particularly employers, thinking that it is a bad Act. That is why we are seeking to make the changes contained in the order.
What is at issue is not the right to redundancy payments, the duty to consult with the unions, or the duty to notify the Department. What is at issue is solely the length of time which under the law must elapse before certain medium-scale redundancies which are proposed can be implemented.
In laying this order and the next one that we are to discuss, the Government are pressing on with the programme that they were elected to carry out, by changing employment protection law where it is damaging the ability of businesses to function.
I think that I was wrong in not making clear that we are changing from 60 days to 30 days. I am sorry that I did not make that plain in the course of my speech. The change will help small businesses by its psychological effect.
Opposition Members, before voting against the order—which I presume is their intention—should heed this warning. We are concerned here with employment. We are concerned with the effects that the legislation has had on small businesses in particular. It is generally recognised—I am sure that Labour Members will have found this, just as much as any of my hon. Friends—that over the past four years the Employment Protection Act has been built up as an ogre that is damaging the prospects of employment. [Interruption.] It is suggested that we built up that ogre. If this House could have that effect on small businesses, we might be able to get another impression going.
The truth is that all the evidence supports the fact—as I think Harold Lever recognised—that in many respects the Employment Protection Act has become a deterrent to the employment of more labour. That is what we are trying to get home in the order, and that is why I ask Opposition Members, despite all that has happened this evening, to listen to the argument and to recognise that in the order the Government are not only accepting what is reasonable in respect of redundancies on the scale that I have mentioned but are also doing something that is psychologically of great importance for small businesses and the employment of additional labour.
It is on that basis that I commend the order to the House.

10.39 p.m.

Mr. Harold Walker: I doubt whether the Secretary of State has ever been as glad to resume his seat. I did not think that he could make such a shambles of the Department of Employment within 90 days of taking office. As has been said, what we have had is a recitation of what the order contains and virtually no case whatever made out for it.
We should be clear from the outset that the orders before us tonight are only the beginning of the Government's attack on the statutory protections and safeguards that Parliament—belatedly but rightly—has granted to workers in recent years. They are safeguards that not only the British Parliament but also Parliaments in Western Europe generally have thought it proper to provide in one form or another.
In addition to the two orders, there are further inroads into worker protection contained in the so-called "working papers"—one might have said "working medicine"—put out by the Secretary of State a couple of weeks ago. The House should be under no illusion that the proposals in those papers will exhaust the zeal of the Government to weaken the position of workers vis-a-vis their employers or diminish their eagerness to weaken the role and strength of the trade unions.
I mention these other matters because the orders, despicable as they are in themselves, must be seen as part of a yet more serious array of changes in employment legislation. Under review are the maternity provisions, guaranteed pay provisions, the provision for appointment of workers' safety representatives, the role of ACAS and a whole range of other matters. I ask the Secretary of State to come clean on them before the House rises for the recess.
The right hon. Gentleman said that he had been in correspondence with the TUC. It is fair to point out that he published these orders on the same day as he wrote to the TUC.

Mr. Prior: That is not the case.

Mr. Walker: The right hon. Gentleman says that that is not the case. I accept that, but there must have been very little in it.

Mr. Prior: I should like to make it absolutely plain that we wrote to the TUC, the CBI and many other organisations long before we published the orders and laid them before Parliament. In fact, from memory, I would say that it was at least three weeks before. Therefore, it is not true to say that we consulted on the same day as we published the orders.

Mr. Walker: I point to the fact that the right hon. Gentleman replied to the TUC on 10 July, which was the day on which the orders were laid. It is worth repeating the view of the TUC. It said:
These changes represent a significant deterioration in the existing legal rights of many workers".
I turn to the orders themselves. The right hon. Gentleman seemed to base his case on the surveys that had been carried out. With the exception of the TUC, and the possible exception of the Conservative 

Party Central Office small business bureau, only employers' organisations were consulted. Therefore, the reaction was entirely predictable. Understandably, an employer will resist and oppose anything that diminishes his freedom. It is, of course, true that they have objected to the Employment Protection Act. However, if I carried out a survey of workers and told the right hon. Gentleman that they were overwhelmingly in support of employment protection legislation, I am sure that his reply would be along the lines of Mandy Rice-Davies' comment "Of course, they would, wouldn't they".
When we were in Government and received criticism of the employment protection legislation, we sought to carry out some objective and impartial surveys. It is perhaps worth referring to what they said, in the light of the right hon. Gentleman's comments. One was a study carried out by the Policy Studies Institute. I hope that the right hon. Gentleman is not sneering and suggesting that that is anything other than an impartial and objective body. It is a highly respectable body which surveyed firms employing between 50 and 5,000 people. The right hon. Gentleman talked about the way in which the Employment Protection Act had become an ogre for small businesses. The institute said:
In discussing the nature of the effects of employment protection legislation, whether these are beneficial or not to management, and the variations in effect, there is a danger of giving an exaggerated impression of the impact of the legislation. As we said at the start of these conclusions the main finding to emerge from our study was really how modest had been the influence of an apparently major package of employment legislation. Many employers had developed policies and practices which were in advance of the minimum standards specified in the legislation.
Many employers had developed policies and practices which were in advance of the minimum standards specified in the legislation".
On the specific issue before the house, the institute said:
only a quarter of the managers interviewed in our survey of 301 plants said that requirements on redundancy procedure had influenced them at all; and only 3 per cent. said that they had been a major influence.
It went on to say:
There was very little sign in our findings that employment protection legislation was inhibiting industrial recovery or contributing to the high levels of unemployment by discouraging employers from taking on new people.


That is a direct refutation of what the right hon. Gentleman said from an impartial and independent source. I quote further from the report:
Indeed we can unequivocally reject the crude form of that criticism … when we talked to managers where there was a rising demand for products but where they were not recruiting … they rarely cited any aspect of employment legislation as a reason for not increasing their work force … When we put the suggestion to employers that employment protection legislation did inhibit the recruitment of new labour directly to a sub-sample of our respondents to whom it was more likely to apply, the majority rejected it.
I apologise for inflicting those lengthy quotations on the House but it is right to do so because they directly refute the right hon. Gentleman's case.
I am sure that right hon. and hon. Gentlemen are desperately anxious to point out that the PSI study was of the larger firms with a minimum of 50 employees. There was also a survey of small firms carried out, again by an independent body, the Opinion Research Centre. The right hon. Gentleman referred to that when he wrote to the TUC, and said of the employers interviewed:
as many as 6 per cent. mentioned employment legislation as among their main difficulties.
Why did the right hon. Gentleman not say "as few as 6 per cent."? He might also have pointed out that employment legislation was ranked twelfth in the difficulties facing employers. They attached a much higher priority to the burden of VAT, and that was when it was only 8 per cent. If the Government want to please small employers, they should chop VAT.
Only 2 per cent. of the employers questioned by the Opinion Research Centre mentioned employment legislation when asked about the main difficulties that they faced in running their business, and only 7 per cent. referred to it when specifically asked whether any Government measures had caused difficulties. Many months ago officials in the Department of Employment provided me with the figures that I have quoted, and I am surprised that the right hon. Gentleman was not given them.

Mr. Prior: Will the right hon. Gentleman explain why Mr. Harold Lever—now Lord Lever—said:

We must be careful that the EPA is not turned into an Employment Destruction Act. If something is to be done for the pool of a million and a half unemployed, then small businesses are one of our best hopes."?

Mr. Walker: Will the right hon. Gentleman bear in mind that Lord Lever also said that he did not advocate any changes in the Employment Protection Act?
The right hon. Gentleman has sought to give the impression that he has been generous and could have treated the provisions with more severity, but he has exploited the statute to the maximum without having to introduce primary legislation.
The right hon. Gentleman gave the impression in his letter to the TUC that perhaps the only purpose of the 60 days' notice being given to his Department was to enable the MSC to mount training and retraining exercises. But that is far from the case that we argued when we introduced the provisions in 1975. The right hon. Gentleman should remember that. The notification does not go to the MSC; it goes to the Secretary of State. As we found, that provides an invaluable period during which the Department of Employment can examine a host of possibilities, often in conjunction with other Departments, to render advice and assist-Industry, to enable, if possible, the enterprise to avoid having to make workers redundant and, in conjunction with other Departments to render advice and assistance to enable the firm to avoid the loss of jobs. That is a proper role for the Department of Employment.
If that proves impossible, the time gap will also enable the MSC to do what it can, not just in terms of training and retraining but by the swiftest use of the employment placement services so that it can help people find new jobs wherever possible.
The Secretary of State should know that if an employer finds the 60 days' notice provision an intolerable requirement, for commercial or other reasons, he can find relief in section 100(6) of the Act, which provides:
If in any case there are special circumstances rendering it not reasonably practicable for the employer to comply with any of the requirements of subsections (1) to (5) above, he shall take all such steps towards compliance with that requirement as are reasonably practicable in those circumstances.


There is the answer for the employer who finds himself in difficulty. Why does the Secretary of State need the order? Many employers have exercised the option available in that section of the Act.
A similar provision qualifies the requirement to give prior notification to unions. No employer can plead that he is subject to an intolerable and inescapable statutory obligation. The prior notice for unions, which is affected by the order, has often been of great value to many companies. Frequently, in order to save the jobs of its members, the union will take an initiative that may lead to the introduction of changed working practices that benefit the company and improve its efficiency.
I ask again what benefit the Secretary of State believes will flow from the order. What is his purpose in introducing a measure which flows completely against the tide of employment protection developments in Europe and Scandinavia? It goes completely against the developing practice in the United States, where, on a visit last year, I learnt that lengthy prior notice is increasingly becoming a condition of labour contracts.

Mr. Nicholas Scott: Can the right hon. Gentleman confirm that the order is precisely in line with the EEC directive of 1975 on the notification of redundancies?

Mr. Walker: The trend in Europe is towards greater protection for workers and longer prior notification of mass dismissals, but the Secretary of State is turning our tide the opposite way.

Mr. Harry Ewing: Does my right hon. Friend agree that the provisions in the order are in line with the minimum requirements of the EEC and that the Government are interested only in minimum standards and not in giving real protection to workers?

Mr. Walker: I do not wish to do the hon. Member for Chelsea (Mr. Scott) an injustice, but if he consults the unions in Europe he will learn that they are seeking to extend prior notice requirements to come up to our standards. The Government want to cut them back.
The Secretary of State and the Government have shown not the slightest recognition of the hardship, misery and suffering that is endured by workers and

their families when they are confronted with redundancies. The Government's approach to such deep human problems owes more to callous, cynical political opportunism pandering, in the run-up to the election, to an irrational prejudice which they did so much to provoke.
The Government give the impression of being completely indifferent to the effect that the issues before us and their wider strategy will have on industrial relations generally. To that extent, they seem to have learnt little if anything from the bitter lessons of the former Conservative Government. Perhaps they hope that, by dribbling out their proposals a little at a time, they will not have the same impact as would a comprehensive declaration of Tory policy. I tell them that it will not work.
Not only will it not work, but working people will see the kind of measure that we have before us as part of a wider attack on them and their standards. I pray that we shall not endure the kind of confrontation that the Conservative Government provoked. The policies we now see oozing daily from the Government, not only in industrial relations, seem deliberately calculated needlessly to arouse the conflict and the strife that we could well do without and that we could avoid.
The Conservative Party seems intent on dismantling the decent, modest and humane basic protections for ordinary workers that we have introduced over the past five years. I give the Government notice now that not only will we repair the damage that they are seeking to do but we shall build in future on what we have achieved so far.

10.56 p.m.

Mr. David Madel: I do not think that it came as any surprise to the right hon. Member for Doncaster (Mr. Walker) that when we returned to office we would be making one or two alterations to the Employment Protection Act. The order embodies one of the arguments we put in Committee on the Bill almost four years ago to the day.
When the right hon. Gentleman was answering our points then, he was in nothing like the bellicose mood that he is in tonight. I want to point out how conditions have changed since then


because I think that, on reflection, he will agree that what we are trying to do is in line with what we were putting forward in 1975, which did not arouse the intense hostility of the Labour Government. Indeed, on many occasions then the Labour Government bent over backwards to try to meet us on our amendments.
Two things at least have changed considerably. First, the number of people who have been made redundant has increased substantially. That is regrettable. Secondly, the Manpower Services Commission is four years older and has acquired much more expertise in handling these situations where there is notification of redundancies.
The right hon. Gentleman mentioned the report by the Policy Studies' Institute in June 1978. He did not quote some of the more relevant parts of it. For example, it said:
legislation on redundancy procedures had had little general impact because the bulk of employers had developed effective ways of avoiding and dealing with redundancy before their introduction. Voluntary redundancy schemes, in whose development trade union influence had been substantial, played a major part in such policies.
That underlines what we were saying in 1975, namely, that much of the Act would bring employers and unions closer together, given the worsening economic situation then, and would certainly result in more refined measures in carrying out redundancy procedures.
But before the Labour Government put forward their plans in the Bill they introduced a consultative document. In paragraph 66 of the document, dealing with the question whether the period should be 60 or 30 days, they said that the minimum period of warning might be two months; they were not absolutely certain. I stress again that the alteration that the order will bring about does not in any way affect section 99 of the Act. Section 99(5)(e) provides
the proposed method of carrying out the dismissals, with due regard to an agreed procedure, including the period over which the dismissals will take effect.
Therefore, in no way can it be said that the order is an attack on the trade unions or a dramatic attempt to undermine big sections of the 1975 Act.
I remind the right hon. Gentleman of two things that he said when we were

discussing our amendment four years ago. First, he said:
On many occasions 30 days will be adequate, but it is not difficult to envisage occasions when it will not be adequate".
Agreed, but the point is that he was uncertain whether the then Government had it right. When he replied to the debate on the amendment he said:
I remind the Committee that the Secretary of State has power under Clause 95(5) to vary the periods here in question. If experience showed that, either generally or in particular cases, the 60 days might be varied in the way suggested"—
which was to come down to 30 days—
and that it might be helpful and construe-five to vary it from 60 days to, say, 30 days, we would seek to do that. But I think that for the time being we have it right, and ought to proceed on the basis as we have it in the Bill."—[Official Report, Standing Committee F, 13 July 1975; c. 1437–41.]
The hon. Gentleman said then that
for the time being we have it right".
What we are saying is that because unemployment has risen in the past four years, and because there is plenty of evidence that the present drafting is a deterrent to small businesses to take on additional people, the very least the Opposition can do is to let us have a shot at changing the figure to 30 and see how we get on. If we get into difficulties, and if it proves unsatisfactory, I am sure that my right hon. Friend the Secretary of State will use his powers under the 1975 Act to alter the period again.
I ask the right hon. Gentleman at least meet the spirit of his words in 1975 by not dividing the House tonight. He knows very well that huge sections of the 1975 Act went through with our support and approval. The Government of the day welcomed many of our amendments. I hope that the Opposition will at least give us a chance tonight to make an alteration that we think will help employment.

11.2 p.m.

Mr. Cyril Smith: My right hon. and hon. Friends and I will support the order and the order that we are to debate afterwards.

Mr. Cryer: Terrible.

Mr. Smith: Some of us served on the Standing Committee that considered the Employment Protection Act.

Mr. Cryer: So did I.

Mr. Smith: And some of us have had practical experience of the working of the Act.

Mr. Cryer: From the employers' side.

Mr. Smith: Some of us have practical experience of the workers' side.
I have never taken the view that the Act was a serious deterrent to employers taking on workers, but I believe that it is part, though only part, of a whole area of bureaucratic control of employers, which in total prevents employers risking taking on more employees. I think that that applies to both orders, though to neither in isolation.
The fact that I do not accept that the Act itself has been a serious deterrent does not mean that we cannot pass amendments to improve it. If some of the amendments suggested by the right hon. Member for Doncaster (Mr. Walker), leading for the Opposition tonight, were proposed by the Government—on matters such as maintenance, maternity leave and so on—I for one should be in the Lobby against them. But it seems to me to be good common sense to make amendments which in practical terms have proved to be necessary.
I declare an interest as someone with a small business. Small businesses are sick and tired of legislation that has been imposed on them, of regulations that they have to follow for the slightest trivialities. They have a feeling that the law is never on their side but is always on the side of the employees.

Mr. Cryer: Rubbish.

Mr. Smith: Whether the hon. Gentleman likes it or not, it is a fact that that is how employers feel. They think that the dice are loaded against them. The orders will help to load the dice slightly the other way.
It is for these reasons that my right hon. and hon. Friends and I will be supporting the Government on both orders.

11.5 p.m.

Mr. Selwyn Gummer: I shall not detain the House for long. I believe that it is important for those of us who have had experience in dealing with small businesses to relate something of that

experience to Members on the Opposition Front Bench, none of whom has been in the position of implementing the Act and, therefore, none of whom has any understanding of dealing with the problem. The right hon. Member for Doncaster (Mr. Walker) did not give way to any of my right hon. or hon. Friends who would have been able to help him by passing on experience of dealing with the Act instead of the theory which is constantly spouted by those who do not have to make it work.
We want to create a society in which businesses want to take on more employees instead of feeling constantly that the Government and the law make it difficult and complicated for them to do so. The right hon. Gentleman is an intelligent man, and we know that from the speed with which he was able to put forward his views. Many of those working in small businesses are concerned in the running of their own show and they are not experienced in the details of the law and the Acts which have been laid around their shoulders. They want a simple and clear way of taking on employees and they want to feel that the Government are encouraging them in that.
The problem with the Employment Protection Act is that it asked of the small business man a length of notice which it was not possible to give within the normal capital requirements and availabilities of small firms. The small business man had the deep feeling that the Government were concerned to make employment so difficult that it was better not to expand than to take on extra people. We have to deal with our unemployment problem, and that means making small businesses feel that it is worth their while taking on people and that they will not be laden with all sorts of extra requirements which make their position impossible.
The right hon. Member for Doncaster did not provide the opportunity for any Conservative Member to ask him about the matter. He gave way only to his right hon. Friend the Member for Ebbw Vale (Mr. Foot).

Mr. Foot: My right hon. Friend gave way to the hon. Member for Chelsea (Mr. Scott).

Mr. Gummer: When he gave way to my hon. Friend the Member for Chelsea (Mr. Scott), the right hon. Gentleman did not answer the question.

Mr. Cryer: What does the hon. Gentleman know about the matter?

Mr. Gummer: The hon. Member for Keighley (Mr. Cryer) has never run a business in his life.

Mr. Cryer: I should correct the hon. Gentleman. I helped to run a taxi business which helped to see my way through university because I received no grant from the local authority. The hon. Gentleman says that the Government desperately want to help small businesses. What will be said to the small businesses in intermediate areas which no longer have the small firms employment subsidy? What will be said to the 64 small businesses in my constituency that took advantage of that subsidy, which was phased out within a few days by the hon. Gentleman's colleagues on the Government Front Bench?

Mr. Gummer: I am sure that the hon. Gentleman is perfectly able to tell small business men in his constituency what they may do in the circumstances. That has nothing to do with the order that we are discussing. Labour Members know perfectly well that it is a reasonable order and that it will be accepted by reasonable people. The sad thing about the right hon. Gentleman's speech is that it was a doctrinaire speech, written by someone who is concerned only to make party political points instead of saving jobs. We are concerned about the unemployed, not about theoretical arguments on the basis of a theoretical Government.

Mr. Giles Radice: If the issue of the small business is so important, why does the order not apply to the small business alone?

Mr. Gummer: It is clear to me that it is not only a question of small businesses in present circumstances. It is necessary for all businesses to react much more quickly to the changing economic climate. If the hon. Gentleman suggests that we can make some firm distinction between small and medium businesses, again I suggest that he has never run a business

in his life. This is the problem with the Opposition. It is extremely difficult, looking through the lists of names that made up the last Cabinet and that make up the putative Cabinet, to find anyone who has had any experience in business.
The main virtue of the order is that it puts forward a suggestion which comes from experience, following negotiation with those who are concerned to make it operate. Therefore, I believe that it is necessary—

Mr. Harold Walker: Mr. Harold Walker rose

Mr. Gummer: If the right hon. Member wishes me to give way to him, I shall gladly do so, even though he would not give way to me.

Mr. Walker: I wanted the hon. Gentleman to give way to me because a few moments ago he made some rather personal references to me. Before making them, I think that he might have checked to discover how valid they were. I realise that I may not be able to remove his anxiety totally, but I must tell him that before I became a Member I spent several years in middle management in a medium engineering firm.

Mr. Gummer: I am very pleased to hear that from the right hon. Gentleman. I also hope that he will take note of the fact that I gave way to him because I felt he might have something to contribute to my knowledge. I believe that debates in this House are intended to contribute to the knowledge of right hon. and hon. Members on both sides. I am only sorry that he did not extend the same courtesy to me.
The fact is that this is a reasonable measure, and I am sure that when the right hon. Gentleman was in middle management he, too, would have liked to have this precise order in being. He would have liked to be working with a 30-day period rather than with a 60-day period. Therefore, I suggest that all reasonable people running ordinary businesses would find the proposal in the order an acceptable period of notice. I suggest also that the right lion. Gentleman knows that most trade unions and most other groups in society would agree that this is not an unreasonable period of notice to lay upon the shoulders of the owners of small businesses.
All our employment protection legislation should be concerned with increasing employment opportunities. I believe that this order will do that and that to reject it would make employment more difficult to obtain rather than easier.

11.12 p.m.

Mr. Harry Ewing: It is appropriate that we are discussing this order on the very day on which unemployment in Great Britain has increased by 110,000.
I remind the hon. Member for Eye (Mr. Gummer) that those of my right hon. and hon. Friends whom he denigrates for not having any managerial experience succeeded in every month of this year from January to May in reducing unemployment, while his right hon. and hon. Friends who have had all the managerial experience have succeeded in the past two months in increasing the level of unemployment by more than a quarter of a million—[HON. MEMBERS: "Labour doubled it."] I hope that we shall have no more lectures about managerial experience from those who have added a quarter of a million people to the ranks of the unemployed since they came to power on 3 May this year.
As the hon. Member for Rochdale (Mr. Smith) said, the orders on the Order Paper have nothing to do with encouraging small businesses to take on more employees. They have everything to do with making it easier for both small and large businesses to dispense with the services of employees at much shorter notice. I am astonished by the suggestion of the Liberal Party spokesman, the hon. Member for Rochdale, that he and his right hon. and hon. Friends will go into the Division Lobby to support a measure which will make it easier for employers to dismiss employees at shorter notice than hitherto has been the case.
Since the Act was introduced in 1975, I have received only one letter on this subject from all the industries in my constituency, which is the most highly industrialised constituency in Scotland. That letter was from what I would call a Victorian employer complaining about the 1975 Act and the protection that it gave to his employees. He was saying not that the Act made it more difficult for him to take on more employees but that it made it difficult for him to dis-

pense with the services of employees at a minute's notice.
The order is a step along the road in the Conservative Party's philosophy. I hand it to the Secretary of State that he did not do too badly as a reluctant debutante thrown into the breach when the Under-Secretary failed to turn up for an important debate. But the right hon. Gentleman, in his unexpected speech, did not make the point that this is the first step along the road to switching what the Tories call the balance of power between the trade union movement and employers. That is what the order is about. It has nothing to do with the ability of industry or business, small and large, to take on additional employees.
Since 1975, when my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth), assisted by my right hon. Friend the Member for Doncaster (Mr. Walker), introduced the legislation, there have been many occasions when the 60-day notice has provided sufficient time for management and unions of industries that would have gone out of existence to combine in an effort to save the industries. I can quote examples in my constituency where notice has been given that a firm was in difficulty, but the firm has got out of difficulty due to the joint effort of management and trade union. I can quote examples where redundancy notices have been issued and then withdrawn. There have even been cases where redundancy notices were not only withdrawn but the firm concerned was able to take on additional employees.
I hope that the House is under no illusions. I plead with the hon. Member for Rochdale not to be misled by what the Secretary of State has said. The orders have nothing to do with the ability of small business or large industry to take on additional employees. They have everything to do with making it easier for industries, both large and small, to dispense with the services of employees at much shorter notice. In the process, such industries will be put in greater jeopardy and greater risk because the time available to save them will be shorter.
The orders are totally misguided. We are talking about human beings. Conservative Members talk of redundancies as if they did not mean anything. One


redundancy is a tragedy to the family that it affects. Although the Minister has apologised to the House for his late arrival, it is an insult to those families that he was not in his place when the order should have been moved. If I listen to the Under-Secretary with less respect than normal, I am sure that he will understand my feelings. I share the feelings of many of the people I represent that the orders will put them in a state of anxiety. Whenever employees see their firm drifting into trouble, they will know that the 60-day period has been cut in half by the Government.
The EEC insists that 30 days be the minimum standard. Tonight the Government propose that we adopt that standard—the lowest possible standard. Be it on their head. Working people and modern, enlightened employers will not thank them for it.

11.20 p.m.

Mr. Nicholas Scott: We must become used to Satan denouncing sin. To hear a Minister in the Labour Government, with the nodding encouragement of the right hon. Member for Ebbw Vale (Mr. Foot), denouncing the present Government for their unemployment record when his Government presided over a doubling in unemployment beggars the mind.
It has been said that the difference between the parties is in their attitudes to unemployment. It certainly is. I agree that it is appropriate to discuss this order on the day when unemployment was found to have increased by 120,000. That increase is almost entirely due to school leavers coming on to the unemployment register.
My view, and that of employers and, privately, of many others, is that school leavers have suffered most from the restrictive effects of the Employment Protection Act. Employers have been reluctant to take on young people because of the impact of that Act on the work forces. The passage of the order will offer hope and encouragement to young people entering the job market.

Mr. Harry Ewing: Does the hon. Member accept that 50,000 of those who make up the increase in unemployment have nothing to do with school leaving? In Scotland, not only has unemployment

increased but the number of job vacancies has decreased. That is a direct result of the Conservative Government's policies.

Mr. Scott: The majority of those who have joined the register of unemployed are school leavers. Seasonally adjusted, the unemployment figures still show a downward trend.

Mr. Greville Janner: Can the hon. Gentleman explain why he considers it to be good management for business, large or small, to be free to make young or old people redundant without sufficient warning?

Mr. Scott: I shall deal with that matter.
The Employment Protection Act formed part of the bargain between the previous Government and the trade union movement, wrapped in the cocoon of the social contract. The trade union movement is anxious to protect employment. Trade union members are employed. The unemployed are not members of unions. It is understandable that the trade unions should be more anxious to protect those who are employed and who pay their union dues than to look after the rights of the unemployed. The figures demonstrate that the Labour Government failed the unemployed.
I come now to what was said by the right hon. Member for Doncaster (Mr. Walker). I must say that I am glad that he is not dyslexic, since anybody who could read at that speed deserves a prize in the House. He quoted at immense length from the PSI survey as though in direct rebuttal of the point that my right hon. Friend the Secretary of State made about the impact of the employment protection legislation on small firms. Eventually he admitted—although at that point he was reading so rapidly that it was difficult to pick it up—that the survey covered no firms with fewer than 50 people.
It is precisely firms with fewer than 50 employees that we are talking about and which have suffered most from the impact of the employment protection legislation. It is all right for ICI and the giants to be able to cope with the intricacies of the legislation. It is very difficult for small firms to do so.
I shall give the right hon. Gentleman two figures before I sit down. There are


1·5 million people unemployed in this country, and about the same number of small firms. If we relieved them of the burden of the Employment Protection Act and made it possible for each of them to take on one extra person, or gave them the encouragement to take on one extra person, that might very well make a bigger hole in the unemployment figures than anything else that the Government could do.
I urge the House to support the order.

11.26 p.m.

Mr. Eric G. Varley: In rising to speak at this stage, I apologise to those of my hon. Friends who are trying to catch the eye of the Chair, but I dare say that they will have an opportunity on the next order to make some of the points that they were hoping to make in the present debate.
We found the explanation given by the Secretary of State, when he read out the Under-Secretary's speech, totally unacceptable and unconvincing. To limit the period of advance consultation and notification to 30 days in respect of fewer than 100 redundancies is a move in the wrong direction, as my right hon. Friend the Member for Doncaster (Mr. Walker) said, and certainly a move in the wrong direction in relation to Europe. When the hon. Member for Chelsea (Mr. Scott), the professional Young Conservative, intervened to refer to Europe, he plainly misunderstood the position in Europe. All Europe is moving in the kind of direction that we have been moving over the past few years. I shall show in a moment how a bad employer can make use of these changes.
We have two main objections to the changes made in the order. The notification arrangements currently in operation have been extremely valuable to workers for facilitating detailed discussions with a view to trying to avoid redundancies, finding means to avoid redundancies. We have many examples of that, for instance, when the temporary employment subsidy was in operation and when we were to proceed with the short-time working compensation scheme. That is a factor that the Secretary of State and other Ministers in the Department of Employment have not understood.
Second, when redundancies have been inevitable, as sometimes they are, the 60-

day notification period has allowed for proper discussions about the level of compensation, which have helped the Manpower Services Commission. It has certainly given the Commission the opportunity to talk about training, retraining and all the other measures which could be put into operation to mitigate the hardship.
One of the main arguments which has been used by the Manpower Services Commission when redundancies have occurred has been that it should have adequate time to assist. [Interruption.] I do not know whether the hon. Member for Staffordshire, South-West (Mr. Cormack) wants to continue in this vein, interrupting and having chats. If he has something to contribute, perhaps he will do so. If he has nothing to contribute, perhaps he will keep his trap shut.

Mr. Patrick Cormack: I was so moved by his eloquence that I was suggesting to the hon. Member for Newham, North-West (Mr. Lewis) that in the leadership stakes he would be a much better candidate.

Mr. Varley: The hon. Gentleman ought to go back where he has been all evening, because he is plainly not in control of his wits.
One of the main arguments used by the Manpower Services Commission in relation to redundancies is that it needs time so that it may start to investigate, explain and try to place people in jobs. That is all to be denied, and we shall find that as a result of the changes here proposed people will go straight to the dole, they will be utterly demoralised, and they will form part of the long-term unemployed.
I should like to give the House some examples of how a bad employer can take advantage of the changes proposed in the order. As section 99 of the Employment Protection Act stands, an employer proposing to dismiss as redundant 198 workers obtains little advantage from declaring them redundant in batches. Under section 99(3)(a), if he proposes on day one to dismiss, for example, 198 workers within a period of 90 days, he must consult 90 days before the first dismissal and consultation has to continue up to day 90. Under section 99(3)(b), if he proposes on day one to


dismiss 99 workers within 30 days, he must consult 60 days before the first dismissal. The best, or worst, he can do after that is to propose the dismissal of another 99 on day 31, and therefore he must consult for another 60 days about those dismissals. From day 31 to day 60 he would be engaged in consultation about all the 198 workers to be dismissed.
Under the order it would be an advantage to a bad employer—and there are some around—to dismiss 198 workers, if there were that number, in batches. That is what will happen in some cases. A bad employer will get round the protection afforded to a large group of people by dismissing them in small batches. There will be complaints in this House, probably from Tory Members, when this happens. All this has to be seen, as my hon. Friend the Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) was saying, against the background of today's mounting unemployment.
It is no good hon. Gentlemen talking about unemployment doubling. We know that the forecast set out in the Financial Statement and Budget Report shows that over the next 12 months, perhaps the next two years, unemployment will go on increasing month by month.

Mr. Tony Marlow: Mr. Tony Marlow (Northampton, North) rose—

Mr. Varley: I shall not give way to the hon. Gentleman. I did not see him in the Chamber when we started the debate. I want to give his hon. and learned Friend the Minister the chance to intervene.

Mr. Marlow: Mr. Marlow rose—

Mr. Varley: I shall give way to the hon. Member if he can honestly say that he was in the Chamber when we started the debate.

Mr. Marlow: I was. Will the right hon. Gentleman please remind the House of what the numbers of unemployed were when the Labour Party came into power, and what were the figures when it left?

Mr. Varley: No one denies that the unemployment rate went up. Over the next 12 months the Under-Secretary and the Secretary of State will not be able to say that for the first five months, or

12 months, of the Tory Government unemployment was falling. They will be coming to the Box every month and saying that unemployment is rising.

Mr. Harry Ewing: Does my right hon. Friend confirm that when the Labour Party came to power in February 1974 the unemployment figure was 3 million, on a three-day week?

Mr. Varley: That is true. All this has to be seen against the background of the Government's industrial policies. The fact that in the last few days £233 million has been lopped off regional assistance will force many of the small firms the Tories want to support to declare even more redundancies. We have to look at things against the overall background of the Budget. Many more workers will be out of a job. We do not know how many.
The Secretary of State is very coy about revealing the statistics. He shelters behind the time-honoured ministerial practice of saying that he does not make forecasts. He has admitted that unemployment will rise. Such things as the rise in MLR will place more people on the dole. Over the next few months there will be bankruptcies galore in the private sector, among some of the small firms that the Tories claim to support. In the new phraseology, jobs will be squeezed out of the public sector by penal cash limits, after the present Cabinet discussions.
The Secretary of State has made his reputation as the "nice guy", the man who can get on with the trade unions. He got away with that before the general election, but I doubt whether he will be able to do so over the next few months. I remember Mr. Alan Fisher, of all people, immediately after the general election, saying "I hope that the Prime Minister appoints Mr. Prior Secretary of State for Employment." I wonder what trade union leaders think of his performance so far.
Now we can judge the right hon. Gentleman by his actions, which so far have shown that he is pursuing policies which are extremely damaging to the trade union movement. First, we have the mean-minded cuts in the training programme and the programme of the Manpower Services Commission. Then we have his proposals for industrial relations legislation which are irrelevant and will prove


as unworkable as the Industrial Relations Act 1972.
Whatever else the right hon. Gentleman was thought to be, we were always given to understand that he was the great consulter, that he would at least talk. There is no evidence that he has consulted the TUC about the order. He sent the TUC a letter, and then decided to lay the order nevertheless. If he has the interests of good industrial relations at heart rather than the unsubstantiated prejudices of the Conservative Party, he would do better to take this mean-minded order back and think again. Because I suspect he will not, we shall vote against it.

11.37 p.m.

The Under-Secretary of State for Employment (Mr. Patrick Mayhew): Mr. Deputy Speaker—[Interruption.] I hope that I shall not be further delayed from beginning my speech with a sincere apology to the House for being late. It is nobody's fault but my own and I deeply regret it. I hope that I may now deal with the serious points raised in the debate.
The order has been blackguarded by the right hon. Members for Doncaster (Mr. Walker) and Chesterfield (Mr. Varley) and the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing). No creditable reason was allowed as being possible for the Government introducing it. The most serious way in which it was put was by the right hon. Member for Chesterfield, who said that, by reducing from 60 days to 30 days the minimum period which has to elapse between the beginning of consultations and the date when the first dismissal becomes effective, we will be in many cases preventing the Manpower Services Commission from doing the valuable work that it can do.
Of course we would allow that a great deal of valuable work can be and is done by the MSC. The training and placing services are all put at the disposal of people threatened with redundancy. Naturally, if the Government believed that by reducing this period we would imperil the ability of the MSC to do that work, we should not do so.
The Manpower Services Commission has been consulted. The Government do not consult only the TUC and the CBI. We consult much more widely. Naturally we consult the Manpower Ser-

vices Commission, which is an extremely important part of the Department of Employment group. We are assured by the Employment Services Division that a reduction in the period of statutory notification from 60 days to 30 days in respect of redundancies affecting fewer than 100 employees—that is all that the order is about—would not impair the service that it provides, given that the Department of Employment ensures that all statutory notifications received by it are processed speedily. That is set out in a letter from the Manpower Services Commission that was written in May. Naturally enough, we are content that by reducing the period we shall not imperil the valuable services that can be performed.
We recognise that consultation is a valuable function. Employers should consult unions when they propose redundancies. However, the purpose of the order is not to vent the spite of a Conservative Government upon workers upon whom the nation depends for its salvation. The reason is that job protection shall not stop at job protection but shall extend to job creation. It is because there is such overwhelming evidence that the present provisions frustrate and unreasonably curtail the creation of jobs that we wish to reduce the period and to meet some of the objections that we have heard expressed.

Mr. Harold Walker: What is the evidence that is overwhelming?

Mr. Mayhew: I refer the right hon. Gentleman to the Engineering Employers Federation—[HON. MEMBERS: "Oh."] It seems that that is no good. Apparently it is no good to refer to the researches and opinions of those who have to do with the creation of wealth in this country. I refer to a survey carried out by the federation involving over 1,100 companies. Of those companies, 334, nearly 30 per cent., cited the redundancy handling provisions as being particularly influential in the running of their companies. If that is not enough, I shall cite the Birmingham Chamber of Industry and Commerce—[HON. MEMBERS: "Oh."] It seems that that is no good. Apparently Birmingham does not know enough about industry. The Opposition do not consider the chamber to be a reliable source. It cites as second in its order of importance the redundancy procedures. It considers them to be factors ranking


as having much influence on decisions that affect employment.
There are those who take part in the business of trying to earn Britain's living who have been saying to us in our constituencies, and to Labour Members in their constituencies if only they would listen, that if we do not mitigate the burden upon employers of employment protection legislation in this respect among others they will not be prepared to meet an upturn in business by increasing the availability of jobs and they will be content to allow things to go on as they are because it is safer so to do.
If the Opposition are not prepared to listen to the voices of those who run businesses in their constituencies, I dare say that they will continue to lose general elections. That is a matter for them. We would be entirely content for that to happen. However, if they listen to those who speak for business, they will know that the burden of employment protection legislation—not entirely the redundancy handling provisions but those in part—is proving disastrous to the creation of jobs.
My right hon. Friend cited the remarks of Mr. Harold Lever, who said that the Employment Protection Act must not be turned into an Employment Destruction Act. That was pooh-poohed by the

right hon. Member for Doncaster, but Mr. Harold Lever did not end there, for he went on to say:
I cannot see them"—
the public authorities—
taking up a million"—
unemployed—
in the next decade. Nor can we expect much from the nationalised industries who are suffering from overmanning. … It is vital that we help small businesses to expand.
That was a very wise observation by Mr. Lever, and that is no doubt why he is now in the House of Lords. It is no less wise than it was when he said it in November of last—

Mr. Leadbitter: On a point of order. Mr. Deputy Speaker. Is it not a fact that, in dealing with statutory instruments, the procedure is that it is the responsibility of the Minister to place before the House—or, indeed, the Committee—as much evidence and documentation as is possible so that the House can debate the matter? Is it not, therefore, improper that the Minister should be giving—

It being one and half hours after the commencement of Proceedings on the motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No 3 (Exempted Business).

The House divided: Ayes 310, Noes 233.

Division No. 79]
AYES
[11.46 p.m.


Adley, Robert
Braine, Sir Bernard
Corrie, John


Aitken, Jonathan
Bright, Graham
Costain, A. P.


Alexander, Richard
Brinton, Timothy
Cranborne, Viscount


Alison, Michael
Brittan, Leon
Critchley, Julian


Alton, David
Brocklebank-Fowler, Christopher
Crouch, David


Amery, Rt Hon Julian
Brooke, Hon Peter
Dean, Paul (North Somerset)


Ancram, Michael
Brown, Michael (Brigg &amp; Sc'thorpe)
Dickens, Geoffrey


Arnold, Tom
Browne, John (Winchester)
Dodsworth, Geoffrey


Aspinwall, Jack
Bruce-Gardyne, John
Dorrell, Stephen


Atkins, Robert (Preston North)
Bryan, Sir Paul
Douglas-Hamilton, Lord James


Atkinson, David (B'mouth East)
Buchanan-Smith, Hon Alick
du Cann, Rt Hon Edward


Baker, Kenneth (St. Marylebone)
Buck, Antony
Dunn, Robert (Dartford)


Baker, Nicholas (North Dorset)
Budgen, Nick
Durant, Tony


Banks, Robert
Bulmer, Esmond
Dykes, Hugh


Beaumont-Dark, Anthony
Butcher, John
Eden, Rt Hon Sir John


Beith, A. J.
Butler, Hon Adam
Edwards, Rt Hon N. (Pembroke)


Bell, Ronald
Cadbury, Jocelyn
Eggar, Timothy


Bendall, Vivian
Carlisle, John (Luton West)
Emery, Peter


Benyon, Thomas (Abingdon)
Carlisle, Kenneth (Lincoln)
Eyre, Reginald


Benyon, W. (Buckingham)
Carlisle, Rt Hon Mark (Runcorn)
Fairbairn, Nicholas


Best, Keith
Chalker, Mrs. Lynda
Fairgrieve, Russell


Bevan, David Gilroy
Channon, Paul
Faith, Mrs. Sheila


Biffen, Rt Hon John
Chapman, Sydney
Fair, John


Biggs-Davison, John
Churchill, W. S.
Fell, Anthony


Blackburn, John
Clark, Hon Alan (Plymouth, Sutton)
Fenner, Mrs. Peggy


Blaker, Peter
Clark, William (Croydon South)
Finsberg, Geoffrey


Body, Richard
Clarke, Kenneth (Rushcliffe)
Fisher, Sir Nigel


Bonsor, Sir Nicholas
Clegg, Walter
Fletcher, Alexander (Edinburgh N)


Boscawen, Hon Robert
Cockeram, Eric
Fletcher-Cooke, Charles


Bottomley, Peter (Woolwich West)
Colvin, Michael
Fookes, Miss Janet


Bowden, Andrew
Cope, John
Forman, Nigel


Boyson, Dr Rhodes
Cormack, Patrick
Fox, Marcus




Fraser, Rt Hon H. (Stafford &amp; St)
McCrindle, Robert
Rost, Peter


Fraser, Peter (South Angus)
Macfarlane, Nell
Royle, Sir Anthony


Freud, Clement
MacGregor, John
Sainsbury, Hon Timothy


Fry, Peter
Mackay, John (Argyll)
St. John-Stevas, Rt Hon Norman


Galbraith, Hon T. G. D.
Macmillan, Rt Hon M. (Farnham)
Scott, Nicholas


Gardiner, George (Reigate)
McNair-Wilson, Michael (Newbury)
Shaw, Michael (Scarborough)


Gardner, Edward (South Fylde)
McNair-Wilson, Patrick (New Forest)
Shelton, William (Streatham)


Garel-Jones, Tristan
McQuarrie, Albert
Shepherd, Colin (Hereford)


Glyn, Dr Alan
Madel, David
Shepherd, Richard(Aldridge-Br'hills)


Goodhart, Philip
Major, John
Shersby, Michael


Goodlad, Alastair
Marland, Paul
Silvester, Fred


Gorst, John
Marlow, Antony
Sims, Roger


Gower, Sir Raymond
Marshall, Michael (Arundel)
Skeet, T. H. H.


Grant, Anthony (Harrow C)
Marten, Neil (Banbury)
Smith, Cyril (Rochdale)


Gray, Hamish
Mates, Michael
Smith, Dudley (War. and Leam'ton)


Griffiths, Peter (Portsmouth N)
Mather, Carol
Speed, Keith


Grimond, Rt Hon J.
Maude, Rt Hon Angus
Speller, Tony


Grist, Ian
Mawby, Ray
Spence, John


Grylls, Michael
Mawhinney, Dr Brian
Spicer, Jim (West Dorset)


Gummer, John Selwyn
Maxwell-Hyslop, Robin
Spicer, Michael (S Worcestershire)


Hamilton, Hon Archie (Eps'm&amp;Ew'll)
Mayhaw, Patrick
Sproat, Iain


Hamilton, Michael (Salisbury)
Mellor, David
Squire, Robin


Hampson, Dr. Keith
Meyer, Sir Anthony
Stainton, Keith


Hannam, John
Miller, Hal (Bromsgrove &amp; Redditch)
Stanbrook, Ivor


Haselhurst, Alan
Mills, Iain (Meriden)
Stanley, John


Hastings, Stephen
Mills, Peter (West Devon)
Steel, Rt Hon David


Havers, Rt Hon Sir Michael
Miscampbell, Norman
Steen, Anthony


Hawkins, Paul
Mitchell, David (Basingstoke)
Stevens, Martin


Hawksley, Warren
Moate, Roger
Stewart, Ian (Hitchin)


Hayhoe, Barney
Monro, Hector
Stewart, John (East Renfrewshire)


Heddle, John
Montgomery, Fergus
Stokes, John


Henderson, Barry
Moore, John
Stradling Thomas J.


Heseltine, Rt Hon Michael
Morris, Michael (Northampton, Sth)
Tapsell, Peter


Hicks, Robert
Morrison, Hon Charles (Devizes)
Taylor, Robert (Croydon NW)


Higgins, Terence L.
Morrison. Hon Peter (City of Chester)
Tebbit, Norman


Hill, James
Murphy, Christopher
Temple-Morris, Peter


Hogg, Hon Douglas (Grantham)
Myles, David
Thompson, Donald


Holland, Philip (Carlton)
Neale, Gerrard
Thorne, Neil (Ilford South)


Hordern, Peter
Nelson, Anthony
Thornton, George


Howell, Rt Hon David (Guildford)
Neubert, Michael
Townend, John (Bridlington)


Howell, Ralph (North Norfolk)
Newton. Tony
Townsend, Cyril D. (Bexieyheath)



Normanton, Tony
Trippier, David


Hunt, David (Wirral)
Nott, Rt Hon John
Trotter, Neville


Hunt, John (Ravensbourne)
Onslow, Cranley
van Straubenzee, W. R.


Hurd, Hon Douglas
Oppenheim, Rt Hon Mrs Sally
Vaughan, Dr Gerard


Irving, Charles (Cheltenham)
Osborn, John
Viggers, Peter


Jenkin, Rt Hon Patrick
Page, John (Harrow, West)
Waddington, David


Jessel, Toby
Pane, Rt Hon R. Graham (Crosby)
Wakeham, John


Johnson Smith, Geoffrey
Parris, Matthew
Waldegrave, Hon William


Johnston, Russell (Inverness)
Patten, Christopher (Bath)
Walker, Rt Hon Peter (Worcester)


Jopling, Rt Hon. Michael
Patten, John (Oxford)
Walker-Smith, Rt Hon Sir Derek


Kaberry, Sir Donald
Pattie, Geoffrey
Wall, Patrick


Kellett-Bowman, Mrs Elaine
Pawsey, James
Waller, Gary


Kershaw, Anthony
Penhaligon, David
Walters, Dennis


Kimball, Marcus
Percival, Sir Ian
Ward, John


King, Rt Hon Tom
Peyton, Rt Hon John
Warren, Kenneth


Kitson, Sir Timothy
Pink, R. Bonner
Watson, John


Knight, Mrs Jill
Pollock, Alexander
Wells, John (Maidstone)


Knox, David
Porter, George
Wells, P. Bowen (Hert'fd&amp;Stev'nage)


Lamont, Norman
Price, David (Eastleigh)
Wheeler, John


Lang, Ian
Prior, Rt Hon James
Whitelaw, Rt Hon William


Langford-Holt, Sir John
Proctor, K. Harvey
Whitney, Raymond


Lawrence, Ivan
Pym, Rt Hon Francis
Wickenden, Keith


Lawson, Nigel
Rathbone, Tim
Wiggin, Jerry


Lee, John
Rees, Peter (Dover and Deal)
Wilkinson, John


Lennox-Boyd, Hon Marti
Rees-Davies, W. R.
Winterton, Nicholas


Lester, Jim (Beeston)
Renton, Tim
Wolfson, Mark


Lewis, Kenneth (Rutland)
Rhodes James, Robert
Young, Sir George (Acton)


Lloyd, Ian (Havant &amp; Waterloo)
Rhys Williams, Sir Brandon
Younger, Rt Hon George


Lloyd, Peter (Fareham)
Ridsdale, Julian



Loveridge, John
Rifkind, Malcolm
TELLERS FOR THE AYES:


Luce, Richard
Roberts, Michael (Cardiff NW)
Mr. Spencer Le Marchant and


Lyell, Nicholas
Ross, Stephen (Isle of Wight)
Mr. Anthony Berry.




NOES


Adams, Allen
Barnett, Rt Hon Joel (Heywood)
Brown, Ronald W. (Hackney S)


Allaun, Frank
Benn, Rt Hon Anthony Wedgwood
Buchan, Norman


Anderson, Donald
Bennett, Andrew (Stockport N)
Callaghan, Rt Hon J. (Cardiff SE)


Archer, Rt Hon Peter
Bidwell, Sydney
Callaghan, Jim (Middleton &amp; P)


Armstrong, Ernest
Booth, Rt Hon Albert
Campbell, Ian


Ashton, Joe
Boothroyd, Miss Betty
Campbell-Savours, Dale


Atkinson, Norman (H'gey, Tott'ham)
Bradley, Tom
Cant, R. B.


Bagier, Gordon A. T.
Brown, Hugh D. (Provan)
Carmichael, Neil


Barnett, Guy (Greenwich)
Brown, Robert C. (Newcastle W)
Cartwright, John







Clark, Dr David (South Shields)
Home Robertson, John
Prescott, John


Cocks, m Hon Michael (Bristol S)
Homewood, William
Price, Christopher (Lewisham West)


Cohen, Stanley
Hooley, Frank
Race, Reg


Concannon, FU Hon J. D.
Horam, John
Radice, Giles


Conlan, Bernard
Howell, Rt Hon Denis (B'ham, Sm H)
Rees, Rt Hon Merlyn (Leeds South)


Cook, Robin F.
Huckfield, Les
Richardson, Miss Jo


Cowans, Harry
Hughes, Mark (Durham)
Roberts, Albert (Normanton)


Cox, Tom (Wandsworth, Tooting)
Hughes, Robert (Aberdeen North)
Roberts, Ernest (Hackney North)


Craigen, J. M. (Glasgow, Maryhill)
Janner, Hon Greville
Roberts, Gwliym (Cannock)


Crowther, J. S.
Jay, Rt Hon Douglas
Robertson, George


Cryer, Bob
Johnson, James (Hull West)
Robinson, Geoffrey (Coventry NW)


Cunliffe, Lawrence
Johnson, Walter (Derby South)
Rodgers, Rt Hon William


Cunningham, George (Islington S)
Jones, Alec (Rhondda)
Rooker, J. W.


Cunningham, Dr John (Whitehaven)
Jones, Dan (Burnley)
Roper, John


Dalyell, Tam
Kilroy-Silk, Robert
Ross, Ernest (Dundee West)


Davidson, Arthur
Kinnock, Neil
Rowlands, Ted


Davies, Rt Hon Denzil (Llaneill)
Lamble, David
Ryman, John


Davies, E. Hudson (Caerphilly)
Lamborn, Harry
Sever, John


Davies, Ifor (Gower)
Lamond, James
Sheerman, Barry


Davis, Clinton (Hackney Central)
Leadbitter, Ted
Sheldon, Rt Hon Robert (A'ton-u-L)


Davis, Terry (B'rm'ham, Stechford)
Leighton, Ronald
Short, Mrs. Renée


Deakins, Eric
Lestor, Miss Joan (Eton &amp; Slough)
Silkin, Rt Hon John (Deptford)


Dean, Joseph (Leeds West)
Lewis, Arthur (Newham North West)
Silkin, Rt Hon S. C. (Dulwich)


Dempsey, James
Lewis, Ron (Carlisle)
Silverman, Julius


Dixon, Donald
Lofthouse, Geoffrey
Skinner, Dennis


Dobson, Frank
Lyon, Alexander (York)
Smith, Rt Hon J. (North Lanarkshire)


Dormand, J. D.
Lyons, Edward (Bradford West)
Snape, Peter


Douglas-Mann, Bruce
Mabon, Rt Hon Dr J Dickson
Soley, Clive


Dubs, Alfred
McDonald, Dr Oonagh
Spearing, Nigel


Duffy, A. E. P.
McElhone, Frank
Spriggs, Leslie


Dunn, James A. (Liverpool, Kirkdale)
McKay, Allen (Penistone)
Stallard, A. W.


Dunnett, Jack
MacKenzie, Rt Hon Gregor
Stoddart, David


Dunwoody, Mrs Gwyneth
Maclennan, Robert
Stott, Roger


Eadie, Alex
McMillan, Tom (Glasgow, Central)
Strang, Gavin


Eastham, Ken
McNally, Thomas
Straw, Jack


Edwards, Robert (Wolv SE)
McNamara, Kevin
Summerskill, Hon Dr Shirley


Ellis, Raymond (NE Derbyshire)
Magee, Bryan
Taylor, Mrs Ann (Bolton West)


Ellis, Tom (Wrexham)
Marks, Kenneth
Thomas, Jeffrey (Abertillery)


English, Michael
Marshall, David (Gl'sgow, Shettles'n)
Thomas, Mike (Newcastle East)


Ennals, Rt Hon David
Marshall, Dr Edmund (Goole)
Thomas, Dr Roger (Carmarthen)


Evans, loan (Aberdare)
Marshall, Jim (Leicester South)
Thorne, Stan (Preston South)


Evans, John (Newton)
Martin, Michael (Gl'gow, Springb'n)
Tilley, John


Ewing, Harry
Mason, Rt Hon Roy
Tinn, James


Faulds, Andrew
Maxton, John
Torney, Tom


Field, Frank
Maynard, Miss Joan
Urwin, Rt Hon Tom


Flannery, Martin
Meacher, Michael
Varley, Rt Hon Eric G.


Fletcher, Ted (Darlington)
Mellish, Rt Hon Robert
Walker, Harold (Doncaster)


Foot, Rt Hon Michael
Mikardo, Ian
Weetch, Ken


Ford, Ben
Millan, Rt Hon Bruce
Wellbeloved, James


Forrester, John
Miller, Dr M S (East Kilbride)
Welsh, Michael


Foulkes, George
Mitchell, Austin (Grimsby)
White, Frank R. (Bury &amp; Radcliffe)


Fraser, John (Lambeth, Norwood)
Mitchell, R. C. (Solon, Itchen)
White, James (Glasgow, Pollok)


Freeson, Rt Hon Reginald
Morris, Rt Hon Alfred (Wythenshawe)
Whitehead, Phillip


Garrett, John (Norwich S)
Morris, Rt Hon Charles (Openshaw)
Whitlock, William


George, Bruce
Morris, Rt Hon John (Aberavon)
Wigley, Dafydd


Gilbert, Rt Hon Dr John
Morton, George
Willey, Rt Hon Frederick


Ginsburg, David
Moyle, Rt Hon Roland
Williams, Rt Hon Alan (Swansea W)


Golding, John
Mulley, Rt Hon Frederick
Williams, Sir Thomas (Warrington)


Gourlay, Harry
Newens, Stanley
Wilson, Gordon (Dundee East)


Grant, George (Morpeth)
Oakes, Gordon
Wilson, Rt Hon Sir Harold (Huyton)


Grant, John (Islington C)
Ogden, Eric
Wilson, William (Coventry SE)


Hamilton, James (Bothwell)
O'Halloran, Michael
Winnick, David


Hardy, Peter
O'Neill, Martin
Woodall, Alec


Harrison, Rt Hon Walter
Orme, Rt Hon Stanley
Woolmer, Kenneth


Hattersley, Rt. Hon Roy
Owen, Rt Hon Dr David
Wrigglesworth, Ian


Haynes, David
Palmer, Arthur
Wright, Miss Sheila


Healey, Rt. Hon Denis
Park, George
Young, David (Bolton East)


Heffer, Eric S.
Parker, John
TELLERS FOR THE NOES:


Hogg, Norman (E Dunbartonshire)
Parry, Robert
Mr. Ted Graham and


Holland, Stuart (L'beth, Vauxhall)
Powell, Raymond (Ogmore)
Mr. Donald Coleman.

Question accordingly agreed to.


Resolved,


That the draft Employment Protection (Handling of Redundancies) Variation Order 1979, which was laid before this House on 10 July, be approved.

UNFAIR DISMISSAL

12.1 a.m.

The Under-Secretary of State for Employment (Mr. Patrick Mayhew): I beg to move,
That the draft Unfair Dismissal (Variation of Qualifying Period) Order 1979, which was laid before this House on 10 July, be approved.
The order is laid before the House in accordance with section 149 of the Employment Protection (Consolidation) Act 1978, and its purpose is to raise the qualifying period of employment for making a complaint of unfair dismissal from the current level of 26 weeks to 52 weeks.
Our decision to lay the order again derives from our determination to see that the creation of new jobs is not curtailed by legislation that is unreasonable and unnecessary in its effect.
The increase in unemployment over the past five years—[Interruption.]

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. It would be of convenience to the Chair if I could hear what the Minister is saying.

Mr. Mayhew: I was referring to a matter of apparent indifference to Labour Members, namely, the increase in unemployment over the past five years. That increase has been much too serious for us to permit any legislation that curtails unreasonably the creation of new jobs to remain unamended. The same is true when one looks at future prospects for trade throughout the world.
But we might all bear in mind at the outset of our short debate that this is no onslaught on the concept of unfair dismissal. It was, after all, the Conservative Government who introduced that concept into our industrial law and put it on the statute book in 1971. The Labour Party had not found time for it in its 12 years of post-war government. Nor can the last Government have envisaged that such an adjustment as the order proposes could possibly be an attack on principle, for they provided in section 149 of the 1978 consolidation Act the procedure which we are employing.
When in 1971 we advanced beyond the remedies of the common law and provided compensation for unfair dismissal for the first time, Parliament fixed the

qualifying period for complaints at two years.
With the advent of a Labour Government in February 1974, the opportunity arose for them to amend the qualifying period. They took the opportunity and the period that they thought it right to substitute for two years was the period that the order will achieve, namely, 52 weeks. It was a period to which the TUC gave its agreement, albeit for a short time, along with the CBI.
But in Committee the Government were assailed and pressed to reduce the period to 12 weeks. The present period of 26 weeks resulted as a compromise. It took effect on 15 March 1975, after a six-month interlude at 52. That being the genesis of the present period of 26 weeks, whatever the merits or disadvantages of enlargement to 52, it can hardly be said that in proposing it we are striking at the ark of the covenant of job protection.

Mr. J. W. Rooker: I remember those debates in the Standing Committee. Parliament decided that it should be 26 weeks. It is no good the hon. and learned Gentleman saying that we have 52 weeks because he and his hon. Friends wanted it. Parliament decided on 26 weeks after consultation between Labour Back Benchers.

Mr. Mayhew: I doubt whether I should have given way to the hon. Gentleman. I was not saying that we were making it 52 weeks because we wanted it at 52 weeks but that it could hardly be claimed that we were striking at a profound principle, since 52 weeks was a period that was, for a short time, acceptable to the Labour Government.
We can take heart in proposing this enlargement from an observation by Mr. Harold Lever in 1977 when, as Chancellor of the Duchy of Lancaster, he had special responsibility for small businesses. He took cognisance, in that position, of what was going on. He said that the Employment Protection Act should not be turned into an Employment Destruction Act.
Since then there has been a great increase in the volume of further evidence available to the Government that the qualification period is having that effect. The qualifying period of service for claims of unfair dismissal has been the


subject of a considerable number of representations from employers, again largely from small firms.
Indeed, in the last year, of the 120 or so representations made to my Department on the subject of the irritation of the unfair dismissal provisions in general, about three-quarters of the letters specifically made the point that the present qualifying period is too short, and since we took office on 3 May we have received some 70 spontaneous letters on the same theme. [Interruption.] I never cease to marvel at how the party of the people, as it likes to call itself, expresses profound contempt when the people actually express their views. Apparently, democracy is acceptable only when it agrees with the creed and dogma of the Labour Party.
I will not swap surveys with the Opposition, but they know that many surveys support the contention that I am putting forward. [Interruption.] It seems that surveys are, to the Labour Party, unreliable, so I will cite two letters we have received. The House can then decide whether they represent a valid point of view. The first is from the North Wales Sign Company. It was written in March 1979. The company is based in Bangor. The letter says:
I would like it on record that I am holding back, as are most business men with whom I come into contact, with regard to taking on more staff. In the sign trade in particular a six-month period is often not long enough to ascertain an employee's true potential. If some leeway could be introduced … I would be happy to employ, and have a dire need to employ, more staff.
The other letter is from MI Finance Limited. It says:
Like so many business people we are deterred from employing more staff due to the present regulations and we are prepared to work harder ourselves rather than take the risk of expanding and employing more staff.
[Interruption.] I will not be deterred by the Opposition's irritation at listening to what people have to say. The difference between this Government and their predecessors is that we seek to legislate for employment protection in a way that will truly protect and create jobs, because we listen to what we are told by those who are engaged in business. Our predecessors maintained a total contempt for those who advanced such reasons.

The next paragraph but one of the letter says:
It is almost an impossibility for an employer to assess whether an employee is satisfactory after a short period of six months, and a Bill with more reasonable provisions will be extremely helpful to all small businesses.

Mr. Ted Leadbitter: The Minister heard one of his hon. Friends proudly say in the previous debate that there were 1,500,000 small businesses in the United Kingdom. He excluded the main employers. The Minister has the audacity to say in the debate on the order before us that he is motivated to produce it because he has received 70 letters—from that number of small businesses. Would not he have served the House much better if he had taken note of my point of order on the previous order and accepted his responsibility as a Minister, giving the House the evidence for the order beforehand, so that we could make a judgment? If he will not be deterred, the House will not be. Should not he give the whole of the evidence instead of isolated letters from his friends?

Mr. Mayhew: I have conceded, with regret, that I wasted a little time of the House in the previous debate, but I do not believe that it was as much as has just been wasted by the hon. Gentleman.
Employers argue that the present period of 26 weeks is not long enough to assess the suitability of a new employee without the fear of a tribunal claim, particularly where the employee is taken on at the beginning of the summer holiday period, and that they therefore hesitate to recruit, especially where the extra labour is likely to be needed for a short period only. They say that they are more ready to dismiss the employee about whose suitability they are uncertain before 26 weeks have elapsed than to give him the benefit of the doubt. Do Labour hon. Members want that?
Those views were also widely endorsed in the course of our consultations on the proposals in the two draft orders. Many of the employers' organisations confirmed again that a period of 26 weeks was too short in many cases—not all—to assess the suitability of an employee, and they all welcomed the proposed extension of the qualifying period to 52 weeks as a fully justified relaxation of the provisions. Many pressed to go to 104 weeks, but


we felt it right to go to 52, which represented the majority view of employers' organisations consulted as to the extent of an increase.

Mr. Michael Grylls: I think it is true that many small firms' organisations have asked for more than 52 weeks, but certainly the change proposed tonight will be a great help. Will my hon. and learned Friend consider one further point for the future? Will he consider the possibility of a two-year moratorium on the unfair dismissal provisions for new firms of up to, say, 25 people? Such a moratorium for firms that were starting up would be a great additional help.

Mr. Mayhew: My hon. Friend, who takes a great interest in these matters, has made a proposal that has attractive features and will be considered.

Mr. Greville Janner: Mr. Greville Janner (Leicester, West) rose—

Mr. Mayhew: I must continue.

Dr. Oonagh McDonald: Dr. Oonagh McDonald (Thurrock) rose—

Mr. Mayhew: This is a short debate, and I must get on.
We in this House are not at all wise if we discount the views of those who take the trouble to acquaint us with them. If the Labour Government had paid more attention to what the country was thinking, they might not have lost the election.

Mr. Janner: Mr. Janner rose—

Mr. Mayhew: I shall not give way. I have given way two or three times.
The matter does not end there. There have been a number of surveys, on differing bases. I concede that they are something of a bran tub: there is something in them for everyone. Those that were undertaken by employers' organisations show convincingly the deterrent effect on employment that the present qualification period has had. I concede that those commissioned by the Department of Employment are not inconsistent with that but that they are less compelling.
Therefore, I shall cite one report that falls into neither category—Coopers and Lybrand's survey that was carried out for the Wilson committee in January 1978

into the investment attitudes and financing of medium companies. It is a report that is free from the taint of partisanship on one side or the other. I quote from the conclusion:
We were frankly surprised at the strength of feeling that was held on this topic by many companies. The main point of concern was the increasing difficulty in recent years in being able to adjust readily the size of the work force to fluctuations in market conditions, or even seasonal changes in demand. … The Employment Protection Act 1975 was seen as a factor which strongly reinforced the trend towards inflexibility. The great majority of companies surveyed were therefore extremely cautious in taking on labour and were left in no doubt that this adversely affected investment decisions, including in some cases the choice between UK and some overseas countries".

Mr. Janner: In view of the representations that have apparently been made regarding a further reduction—returning to the point about the exclusion of small firms altogether from this protection, as raised by the hon. Member for Eye (Mr. Gummer)—will the hon. and learned Gentleman assure the House that this will not be the next step that the Government take? Are we to expect that there is to be—

Mr. Deputy Speaker: Order. The debate must be related to the order that is before us, not the next order.

Mr. Janner: I appreciate that, Mr. Deputy Speaker, but it has been suggested by Labour Members that this order is one of a series that erodes the rights of working people and that the next step is likely to be not merely the reduction in the qualifying period—

Mr. Deputy Speaker: Order. We are not debating the next order.

Mr. Mayhew: The Government have made clear that they are concerned with all aspects in which employment protection legislation bears unreasonably upon businesses in their ability to provide jobs, among other things. To anybody with ears to hear or eyes to read, it must be plain that the qualifying provisions are widely seen as discouraging employers from creating new jobs. It is said that there is ignorance of the Act's provisions and ignorance about the industrial tribunals. That is true. However, the point is that those who are debating whether to add to their staff know that after 26 weeks—

Dr. McDonald: Dr. McDonald rose—

Mr. Mayhew: I shall not give way to the hon. Lady.
After 26 weeks the employee will have only to prove that he was dismissed. It will then be for the employer to discharge the burden of proving that he sacked him for admissible reasons and also that he acted reasonably.

Dr. McDonald: Dr. McDonald rose—

Mr. Deputy Speaker: Order. The hon. Lady knows perfectly well that if the Minister is not giving way she must retain her seat.

Mr. Mayhew: As promised, the Government have had wide consultation on the matters. We are convinced that it is right to raise the qualifying period to the level of 52 weeks. The Labour Government thought that to be the correct period when they introduced their Bill in 1974. We are convinced that a higher proportion of the cases which are quite unmeritorious and bound from the first to fail will, as a result, never reach the tribunals. That will be a great relief to the anxieties of employers about taking on new staff. We are convinced that by that measure a clog will be removed from the matching of labour supply with demand.
I warmly recommend the order to the House.

12.20 a.m.

Mr. Harold Walker: I must say again what I said to the Secretary of State. The Government seem to depend entirely on the views of employers for their guidance on these matters affecting workers' protection, workers' livelihoods and workers' wellbeing. Again, we had from the Minister nothing but a recitation of employers' views. At no stage do the Government appear to be prepared to consult or to be interested in the views of workers or their representatives and organisations.
When I was a Minister in the Department of Employment, we sought to obtain independent, impartial, objective guidance. The hon. and learned Gentleman the Under-Secretary referred to it in passing, but he ignored entirely what it said. I refer again to the PSI study and the Opinion Research Centre study, and I must tell the hon. Member for Chelsea

(Mr. Scott) that I did not rest my earlier argument solely on the PSI study. I based my case also on the Opinion Research Centre study, which consulted firms employing 50 or fewer people.
When the 301 firms were asked specifically about the extent to which employment legislation had caused problems, those which said that the unfair dismissal provisions had given rise to problems comprised a mere 7 per cent. Those were small firms, but this order applies to all firms and not merely small ones, in spite of the fact that the Minister rested his case heavily on the impact of employment legislation on small firms.
The hon. and learned Gentleman referred to the genesis of the unfair dismissal provisions. He said that the Labour Party had had 15 years in office and had not bothered about these matters. The truth is that when the 1966–70 Labour Government left office there was before this House a Bill containing almost exactly the provisions that were later embodied in the Industrial Relations Act. That is why we continued them when we repealed the rest of that Act. They were provisions created by the Labour Government, and I myself played quite a significant part in their creation.
We waited first until the Royal Commission had reported. It recommended very strongly the introduction of machinery for dealing with unfair dismissals. In paragraph 555 of its report the Royal Commission referred to the length of the qualifying period and said:
the fact that he had been dismissed after a short period of employment could in some circumstances have a serious effect on an employee's future prospects".
It is quite true that in our original proposals, because we needed to assess the possible case load, initially we set the qualifying period at two years, but we made it clear that that was an initial trial run and that there was every intention of reducing the qualifying period thereafter.

Mr. Rooker: Is it not a fact that Lord Carr made the same point when speaking as Secretary of State for Employment during the passing of the Industrial Relations Act? Did not he say that the two-year period was a run-in to test the water, with the intention of lowering it in the


future? During the passing of the Industrial Relations Act, was not it widely thought that the Tories put in the unfair dismissal provisions as a sop to win the acquiescence of the trade unons, anyway?

Mr. Walker: I remember that the then Conservative Government frequently quoted against the Opposition that the unfair dismissal provisions could not be objected to and that therefore, by implication, no one could object to the Industrial Relations Bill since a Labour Government had conceived and created them. My hon. Friend is right.
Like many others, the Secretary of State and his Under-Secretary overlook the fact that their unfair dismissal provisions do not provide an absolute guarantee to a worker against being dismissed. They provide a remedy against unfair dismissal. The dismissal has to be unfair before the worker has a right to seek his remedy. Heedless of the duration of the employment, provided he has good grounds and follows the right procedure, an employer can at present, properly and legitimately, dismiss a person. It seems that what some employers want and what the Government are eager to grant is an extended period during which an employer can dismiss without any justification and heedless of the damage that might be done to the individual's livelihood, his career or his reputation.
We have not heard a single word from the Government that shows any recognition of the consequences for the worker who loses his job and the way that this might stigmatise him, prejudice his future chance of employment, damage his livelihood or inflict damage on his family.

Mr. David Mellor: Would the right hon. Gentleman care to comment on the damage done to businesses being dragged before industrial tribunals, often on claims that have no foundation whatever and at considerable expense in obtaining professional advice and waste of executives' time? They are unable to recover costs, except in a small proportion of cases which are frivolous and vexatious. Is he aware how many claims are brought before tribunals and dismissed and the damage that they cause to the flow of British business?

Mr. Walker: I do not intend what I say as a point of criticism but merely as a statement of fact. The hon. Gentleman has not been in the House during the past two years when interminable debates have taken place on the point that he raises. I feel, Mr. Deputy Speaker, that you might reproach me if I were to take up these matters. If the hon. Gentleman looks back through Hansard, he will see that I have frequently chided employers for detracting from what we hoped would be the informality of industrial tribunals, with the least reliance on legal support, the least intervention by solicitors and the minimum of cost.
Employers do not need legal advice. I would discourage them from engaging legal support and taking solicitors to tribunals. What we wanted and what I hope will develop is an informal system of justice that will be inexpensive for every participant. If the employers have the resources to employ solicitors, it is much more grievous and burdensome for the dismissed employee, who does not have any wages, let alone the resources to employ a solicitor.
I am prompted by the intervention of the hon. Member for Putney (Mr. Mellor) to quote a letter that I have before me. Much of the inspiration and the zest for what is being done tonight has come from people like a gentleman writing on behalf of the Tyne, Wear and Northumberland region of the National Federation of Self-Employed. The letter, written to me when I was in office after I had explained why I considered six months was the right period, said:
It takes six months or more for an employee to start taking liberties with his employer. Indeed, the lack of an employment contract during the first six months must surely create the need for employees to be on their best behaviour and it is only after that period that disobedience and unruliness will show itself because of the way that employment legislation compromises the employer. The end of the six month period marks the point of no return and is the trigger for unruliness and disobedience.
The gentleman who wrote that letter was crystallising and putting in blunter language what the hon. and learned Gentleman, with all his urbanity, has been putting forward. I should like to quote one further gem from this philosophy and attitude of mind reflected not only in the letter but in the approach of the Govern-


ment to the business before the House. The letter goes on:
With respect to unfair dismissal and redundancy payments, I feel that it is time a small employer was protected and compensated in a reciprocal manner if he relies on employees that he has trained to do a job but who are enticed away from him by another firm, which so often happens to the detriment of the employer.
I believe that to provide for such instances there should be a retention from the employee's weekly or monthly income to be used as compensation or alternatively the company standing to gain by purloining the man's services should pay compensation equal to redundancy payment in much the same manner as transfer fees for footballers".

Mr. Greville Janner: My right hon. Friend is giving the Government ideas.

Mr. Walker: I agree with my hon. and learned Friend that I must be careful about giving them ideas.
Reading that letter, I was reminded of the way the slaves in the United States in the nineteenth century bought their freedom by deduction of their pay.
The disputes which harm industrial relations and spring from arbitrary dismissals should be resolved in a more decent and civilised way. I thought that that was common ground between the parties. We should establish machinery by which the aggrieved worker can seek a remedy without his workmates having to strike as they had to do in the past.
That is the right way to deal with these matters. The Government apparently do not share that view. By depriving one section of workers access to that machinery, the Government will compel those workers to resort to the more traditional and damaging ways of resolving grievances.
I warn the Government that I fear that, deprived of access to that machinery, workers will resort to the only other method open to them: they will use their industrial muscle. The House should prefer the decent and civilised method of handling grievances through a tribunal.
The Under-Secretary of State leaned heavily on employers' views. I have leaned heavily on the independent, impartial view. We have not heard the view of the workers, except in so far as I may represent the workers in the debate.

We have not heard the management view—the view of those at the sharp end.
The British Institute of Management recently carried out a survey of its members, copies of which were sent to the Government but to which the Government have not referred. Referring to the unfair dismissal provision, the institute states:
This is generally regarded as reasonable although managers consider that the unfair dismissal provisions relating to closed shops need amendment. Otherwise management would not wish to see any changes in the unfair dismissal provisions.
That is a sensible and reasonable view. It is a pity that the Government took no heed of it.
We shall vote against the order.

12.32 a.m.

Mr. Douglas Hogg: Hon. Members agree that almost the greatest problem that faces the United Kingdom and the Western world is the great menace posed by the increasing threat of unemployment. For that reason, we should scrutinise each piece of legislation that comes before the House to determine what effect it may have on employment and unemployment.
I am as certain as I can be certain of anything that some features of the employment protection legislation have diminished substantially the number of jobs available. That is because certain aspects of that legislation make the employment and protection of staff less desirable and less attractive than necessary.
I have had experience of advising employers and employees about the implementation of such legislation. Frequently I have had to advise employees who wish to lodge a claim for compensation. I almost always say to them "Go ahead. The employer is almost certain to pay £500 in order to get rid of the claim."
When an employer asks my advice on similar matters I express the same view, though, of course, I couch it in different language. In doing so I represent the law as it is. Hon. Members would do well to consider the law as it is.
Opposition Members seem to find it difficult to understand that the law in certain respects makes it unattractive for


employers to take the risk new staff.

Mr. David Lambie: Not lawyers, though.

Mr. Hogg: My view is that the order will greatly assist the school leaver and the youngster seeking his first job. The reason is simple, and I commend it to the Opposition. Under the present law, a person who has been employed for 26 weeks has a right to claim compensation for unfair dismissal. [HON. MEMBERS: "Yes, unfair".] I believe that to be too low a threshold, because 26 weeks give too short a time within which to assess a potential employee's suitability for employment.

Mr. Allen McKay: Will the hon. Gentleman give way?

Mr. Hogg: No, this is a short debate and I do not propose to detain the House for much longer.
The low threshold inevitably deters employers from taking employees on trial, and the direct result of that is to increase unemployment. In my view, the minimum threshold that the House should contemplate is 52 weeks. Within such a period it should be possible for most employers to determine whether any employee is suitable. An extended threshold is likely to make employers much readier than they presently are to take on young people and to give them a chance.
I believe that employment prospects will be thereby improved, and for that reason I support the order and suggest that Opposition Members would do well to go with us into the Lobby.

12.37 a.m.

Mr. Ernie Roberts: We have heard that the TUC would not support these variations but the employers do. That is significant enough in itself. They will serve the interests of employers, and they will certainly be against the interests of the 12 million organised workers for whom the TUC speaks. The Employment Protection Act was introduced by the Labour Government in order to defend the interests of workers against the arbitrary attacks of employers.
There has been reference to a statement by Harold Lever that the Employment Protection Act is an Employment Destruction 

Act. By these variation orders the Government are making certain that it becomes such an Act. The orders we have discussed tonight will turn it into just that. They will destroy the protection which workers receive at present under the Act, first, by extending the qualifying period from 26 weeks to 52, thus denying for one year the protection of the Act against unfair dismissal.
On the question of unfair dismissal, I shall now quote Hepple and O'Higgins, the labour relations law experts. They cite one case as follows:
Overruling the industrial tribunal, Mr. Justice Phillips decided that the employer should not he deprived of his right to dismiss unfairly somebody employed less than 26 weeks if 'only the accident' of summary dismissal had occurred.
The right to dismiss unfairly is now to be extended to 52 weeks. Hepple and O'Higgins say also:
… judges will not easily allow interference with the employer's common law right of summary dismissal".
It is that right that employers are trying to get to themselves again through this variation order.
The order we discussed before this one makes further inroads into employment protection for workers in industries large and small. These attacks upon the Employment Protection Act are in conformity with the Tories' promise to attack the legal protection given to workers. The Government are obviously determined to dismantle piecemeal all the protective legislation built up by the workers in this country over the past 150 years. This order is part of that process.
Ever since the workers smashed the Combination Acts of 1824, ever since the victorious workers succeeded in forcing the Government to introduce protective legisation, there have been contrary efforts to remove that protection on the part of the employers and the Tory Government, as exemplified in the orders. Examples of these punitive acts include the 1825 Act restricting trade union organisation and the 1909 Osborne judgment, which took away the right of trade unions to use their political funds. Another example of Tory punitive measures was the Trades Disputes and Trades Unions Act 1927, which banned sympathetic strikes. The last and most infamous example of punitive acts by a Tory Government was


the Industrial Relations Act, which my union defeated by taking industrial action.
The Tory Iron Maiden and her axe-wielding suitors are determined to rape the unions and take away the protection they have won through a Labour Government. This order, removing protection from dismissal without compensation, will hit the young workers. The employer will be able to employ people for 11 months and 27 days before he dismisses them and takes on some other young workers. This move will hurt all seasonal workers who will be dismissed if they work fewer than 52 weeks in a year. Those are the sort of people this order will attack.
The Tories have been clamouring for the removal of the Employment Protection Act, particularly in view of the massive sackings which are about to take place as a result of the Government's axing policy. It is the Government's economic policies which have produced the need for these orders—so that it will be easy for the employers to get rid of the labour they will wish to displace. By doing so in this way they will save millions of pounds in redundancy payments.
These variation orders are part of the process of dismantling the whole of the Act and making it easier to sack the workers. There is already too much power in the Act allowing employers to sack for so-called fair reasons. The Act says:
the question whether the dismissal was fair or unfair, having regard to the reason shown by the employer, shall depend on whether the employer can satisfy the tribunal that in the circumstances … he acted reasonably in treating it as a sufficient reason for dismissing the employee.
That is in relation to an employee's capability. Capability is assessed by reference to the worker's skill, aptitude, health, physical or mental qualities or because of his qualifications, which include
any degree, diploma or other academic, technical or professional qualification relevant to the position the employee held.
For all those reasons, employers can and do unfairly dismiss workers at the moment.
Unfair dismissals will lead to disputes. If workers cannot go to a tribunal, their

only other recourse will be strike action in defence of their jobs or of their shop steward who has been sacked.
West Germany does not have strikes over dismissals of workers. No worker can be dismissed there without the authority of a works council—a joint body of employers and unions. They do not have the problems that we shall have under the order.
The Prime Minister and the Cabinet are hell-bent on provoking confrontation with the unions and working people in the interests of profit and of the dictatorship of capital.

12.46 a.m.

Mr. John Townend: First, I must declare an interest in that I have run a medium business for the last 20 years. I welcome and support what the Minister said. The changes he described are necessary and acceptable, but I hope that they are only the start of a drastic amendment of the Employment Protection Act, which, although well-intentioned, has been a heavy burden on British industry.
The number of cases brought under the Act has been much greater than expected. Many of them are frivolous, as is shown by the fact that the great majority are won by employers. Some are settled out of court in ways which are an exploitation of the Act. The cost to industry in time and legal fees, and the cost to the public, is immense. I understand that this marginal change will save the Treasury £2½ million, which means that the saving to industry will be many times that—about £10 million to £12 million.

Dr. McDonald: The hon. Member mentioned the cost of unfair dismissal legislation for employers. Is he not aware that employers can insure themselves at a very small cost—£8 per employee—against such cases, covering themselves entirely for any legal costs and for any compensation involved? I do not see that that is a large cost to industry.

Mr. Townend: I am well aware that employers can insure themselves, but it is rather expensive and the overall cost to industry must be greater than it would otherwise be because the insurance companies have to make a profit. Nor do I think that one could insure oneself completely for the expenditure of management time.
Small firms are also frightened by some of the bizarre results published in the press, when employers are found guilty of unfair dismissal for dismissing workers found sleeping on the night shift or workers who have been convicted of fraud in the courts.
The situation is so critical in the small business sector that the Act is known as the Unemployment Creation Act. Whether that attitude is justified is arguable, but I am a small business man and mix with small business men. I represent a constituency in which the vast majority of employment is provided by small employers. The smaller a business, the more the regulations become an important factor.
The Government are looking to small business to create more wealth and more jobs. The Conservative Party was committed in its manifesto to encourage small business by restoring incentives and lifting the hand of bureaucracy and legislation from the small firm. The first part of that objective was fulfilled in the Budget with the reductions in taxation, which restored incentive.

Mr. Bob Cryer: It did not satisfy you lot, did it?

Mr. Townend: I am prepared to give way to the hon. Gentleman if he wants to get to his feet instead of barracking me.

Mr. Cryer: The hon. Gentleman keeps repeating the canard that the Government Front Bench are continually coming out with, namely, that the incentives given in the Budget are releasing enormous numbers of entrepreneurs. Will the hon. Gentleman tell the House why it was that all the Conservative Members found the tax incentives so small that they pressed their own leadership for a massive increase in pay immediately?

Mr. Townend: With respect, I think that that intervention was completely irrelevant. The hon. Gentleman does not realise that small business wants incentives and reduced taxation and not subsidies. The order is starting to fulfil the second, commitment of releasing the hand of bureaucracy from small business.

Mr. George Grant: The hon. Gentleman is talking about a minute number of cases in which employers lose. Does he realise that employment protection 

legislation was designed to protect workers against backwoodsmen employers? That is what it was all about. Let us have the real facts about the Act.

Mr. Townend: With respect, the hon. Gentleman is living 30 years in the past. Nobody sacks anybody now who is any good, because employers cannot easily get good people.
The proposals of the Under-Secretary to change the qualifying period from six months to one year may be satisfactory for large firms as represented by the CBI, but they do not go far enough for small and medium businesses. Most medium businesses expected the qualifying period to be extended to two years. The small business committee of the CBI recommended that period. Tinkering with the qualifying period will not make any difference to really small businesses, because the small business man is afraid of tribunals. That is borne out by a conversation that I had with a tailor in the constituency of the hon. Member for Hull, North, who was telling me that he was—

Mr. Kevin McNamara: On a point of order, Mr. Deputy Speaker. The hon. Gentleman is living so much in the past that he cannot remember the name of my constituency. He is trying to recall the name of the constituency in which I beat him.

Mr. Townend: The tailor was regretting that it took him four months to deliver suits to his customers. He employed one man. I asked him whether he had considered taking on anybody else. He told me that he had thought of taking on a young man to teach him the business. He explained that in the tailoring business a great many customers might order suits at a certain time and yet the tailor will find himself very slack 18 months hence. He said that he was afraid of getting a chap who was no good. He contacted the employment exchange and asked "If I take on this man and he is no good, shall I be able to get rid of him without having to go before a tribunal?" He was told "If you follow the procedure, you will be able to get rid of him. He might well take you to the tribunal but you will win." The man said "I do not want to know anything about tribunals", so that job was lost.
I know very well the arguments against exempting small businesses altogether. That would be creating a second class of employee. I accept that that is a valid argument, but I would counter it by saying that when people are working in very close contact with their employers it is a very different relationship from that which applies when they are working in very big factories, with the employer in an office 100 miles away. In small businesses, people who are any good at their job are very rarely sacked. My hon. and learned Friend should accept that it is possibly better in some cases for people to be in jobs with slightly fewer rights than to be on the dole.
I believe that there is a precedent, in that the Sex Discrimination Act 1975 does not apply to firms with fewer than six employees. I urge my hon. and learned Friend earnestly to consider likewise exempting such small firms from the unfair dismissal provisions of the Employment Protection Act. I am sure that if he did so he would be fulfilling our election pledge to lift the dead hand of bureaucracy from small firms.

12.57 a.m.

Mr. Greville Janner: The point that the hon. Member for Bridlington (Mr. Townend) has just made is one which, with the very greatest of respect, I was trying to make during the Minister's speech, and I was told that it was too wide. I accept most readily what the hon. Member said because it illustrates what Labour Members have been saying throughout—namely, that by using the procedure of an order the Government are starting a process which they will continue by statute. They are using the form of an order because they can do it quickly, whereas a statute would take them very much longer.
I have always failed to understand why employers should have the right to dismiss anyone unfairly. I have never understood why it should be the right of a manager to dismiss even a new employee unfairly. I do not know why a qualifying period of 26 weeks is needed, never mind a year, and I have always believed that it was wrong for any employer to dismiss any employee at any time unfairly.
The Employment Protection Act does not, in my view, go far enough to protect people. It says that whether or not an employer dismisses—

Mr. John Townend: Would not the hon. and learned Gentleman accept that where an employer dismisses someone fairly, on good grounds, that employer can still be taken before the industrial tribunal?

Mr. Janner: Yes. Unfortunately, or fortunately, it is possible in a free and democratic country for anyone to go to court and to lose. There is no law against fighting an unsuccessful case. It is, of course, correct that an employee can go to an industrial tribunal and lose. The fact is that 69 per cent. of all employees who go to industrial tribunals lose, and it is not because the Employment Protection Act is too strong. It is because the Employment Protection Act, as it stands, is too weak to protect the employee.
It is a weakness of our law that so many employees with good cases lose them, and in my experience, which is considerable, they lose them in many cases because they cannot produce the evidence, documentary or oral, to back their cases. They have no documents, and the people who could support them will not do so because they are still employed by the same companies and they value their own jobs, their own livelihood, the ability to feed their families. Far from there being too much protection, there is too little.
My hon. Friend the Member for Thurrock (Dr. McDonald), who raised the insurance problem, was quite right. For a mere £8 a year, one can insure against unfair dismissal, and this insurance covers legal advice and the lot. The fact is that the Conservative Party has built up, as the Minister so correctly said, an ogre in the minds of employers. It has created this belief in the minds of small employers that the oppressive employment protection provisions weigh down upon them in such a way that they cannot afford to take on staff. That is completely and absolutely untrue.
The object of a qualifying period at all—it was an object accepted by the Labour Government at the time—was to give people the opportunity to decide for


themselves, within a reasonable time, whether a new employee was or was not capable of doing a job. We have heard a series of hon. Members say that an employer needs 12 months to decide whether an employee can do a job. In the world of management, it is accepted that in most jobs one knows perfectly well within a few weeks whether a man is capable of operating a machine, whether a salesman can sell or whether a person can answer the telephone or do a clerking job. There are exceptions in the area of sales and research, where even 12 months is not enough, but in 99 per cent. of all cases six months is not only enough but is more than enough.

Mr. A. P. Costain: Does not the hon. and learned Gentleman appreciate that when someone wants to expand his business he does not know whether he will be able to sell his products? When he takes on two or three people, he takes them on to try out new products. Many small firms do not do so because they will be clobbered with the trouble of getting rid of these men, and the extra expense, if the products do not succeed.

Mr. Janner: I hope that the House heard not only what the hon. Gentleman said but the words he used. He said that employers are worried about taking on two or three people in case they get clobbered by the law when they want to get rid of them. Those were his precise words. I believe that employers who want to take on two or three people, and who have 26 weeks to decide whether they are doing the job, have more than enough time for that assessment.
I do not believe that the good employer takes on a person because he wants to get rid of him. I do not accept the language used by the Minister about sacking. I believe that the qualifying statutory trial period of 26 weeks is not only a long one but is too long. I serve notice from the Back Benches that, so far as I am concerned, when the next Labour Government get into office we shall reduce the time limit not to 26 weeks but to 13 weeks, and immediately.

1.3 a.m.

Mr. John Loveridge: I believe that increasing the period from 26 to 52 weeks under this order will help in the creation of new jobs. That is the

strongest and most proper justification. It will encourage small firms to take on additional staff. Many small firms looked for a longer period, especially the very smallest firms, as was suggested by my hon. Friend the Member for Surrey, North-West (Mr. Grylls).
The reason for the belief that it will help employment is demonstrated, at least in part, in the recent Massachusetts Institute of Technology survey in the United States, which shows that 66 per cent. of all new jobs there have come from firms with less than 20 staff and that four-fifths of those firms are new firms of less than five years old.
Here is the justification. Small new firms create work. Large firms, public or private, are likely to shed labour as modern technology takes hold. From the small firms sector comes the hope of new jobs for the future. It must be wise to encourage small firms to take on more staff, as the order does. If every small firm took on only one extra worker, that would go a long way to solving the nation's employment problems.
There is a question. Does the fear of the complexities involved in the unfair dismissal procedure deter these firms from expanding? I believe that it does. The head of one firm was quoted in The Sunday Times on 28 August 1977 when speaking of his reasons for turning down an important contract that would have increased his staff from 60 to 75. He said:
It is unfair to say it was only the Employment Protection Act. It is also the high rate of taxation and the capital transfer tax, which is important at my age.
He went on:
If we take on extra people, it is difficult to dispose of them. There is a real disincentive to taking the entrepreneurial risk.
He did not blame the Employment Protection Act entirely—and nor do I—but certain it is that he put some blame on the Act in deterring him from taking on staff, and I believe that to be the case.
Last year a Department of Employment survey showed that 20 per cent. of applications to tribunals came from firms with fewer than 20 workers. It is clear that small firms are involved and affected by the Act. That is natural. If employees lose jobs through their fault, they also lose the first six weeks of


unemployment pay. They are questioned by Department of Employment officials as to whether their dismissal was fair or unfair. For small firms in particular it is likely that technical faults will arise, because most staff are on terms of easy friendship and it is difficult to give written warnings. It is natural for such an employee who is questioned by departmental officials to go before the tribunal. He has nothing to lose. He is prompted to do so. The employer, however, may lose time, be much worried, and be turned away from working on export orders, and he spends much thought and anxious time on unaccustomed legal questions that puzzle and perplex him. Even if there is no case to answer, the procedure must be gone through. It is no wonder that many people prefer to opt out of the tribunal in favour of a separate settlement. There is surely a measure of deterrence to expansion here.
Large firms sometimes get away from the present legislation—

Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I am sorry to interrupt the hon. Member, but can he relate his remarks to the extension of the period from 26 to 52 weeks? This is not a debate on the Employment Protection Act.

Mr. Loveridge: I was applying my argument, Mr. Deputy Speaker, to the part of the Act that relates to the order, and the order is to extend the exemption from 26 to 52 weeks. I believe that my arguments surely demonstrate that in these circumstances there is a measure of incentive to small firms to take on more labour than they would otherwise have done. They suffer from a multitude of legislation, and it is in relation to the whole range of that legislation that they find themselves in greatest difficulty. It is not only the 26-week provision which affects them. They are wounded—that is not too strong an expression—by the mass of legislation.
The order will encourage the creation of employment, and I hope that Labour Members will recognise that aspect of it. They have outlined only the disadvantages, but I hope that in their hearts they know that we must try to get more jobs—and that is what the order will do.

1.10 a.m.

Mr. Michael Martin: I have listened to the debates on the two orders that have been before the House and I am astonished that Conservative Members have not mentioned the plight of workers who may face unfair dismissal. We have been asked to cry over the problems of small business men, but no mention is made of those who are likely to be dismissed by small employers. My experience is that small employers are notoriously bad employers.
An hon. Member referred to garment workers. Insead of talking to a tailor who is an employer, he should have spoken to the girls working in sewing machine factories making shirts. They are told that if they do not do enough piece work in a week they will be sacked at the end of the week.
The Employment Protection Act was passed with the small employer in mind. We do not need to worry about the large employers. We have good collective bargaining systems in the large engineering factories and shipyards. We need to worry about the bricklaying yards and the engineering workshops that we in Glasgow call rat pits. Such places are so bad that they flout even the safety legislation, let alone unfair dismissal provisions.

Mr. Tony Marlow: How many more people would be put out of work if the hon. Gentleman put the small firms in Glasgow out of business, as seems to be his intention?

Mr. Martin: We are interested not only in creating jobs but in creating secure jobs in good working conditions. It is useless to create jobs in firms where an employer can tell a worker that he will be on the dole by Christmas. My hon. Friends have been accused of having no experience of the running of businesses. That is certainly true of me, but I have experience of being made redundant two or three weeks before Christmas and having to go home to my family and tell them that it would not be much of a Christmas that year. That sort of thing happens throughout the country.
The Act has given security to millions of workers. Hourly paid workers who have money docked from their wages if they miss an hour at work have no security except that given by the Act. It


is an excellent measure and it frightens Conservative Members. They want to go back to the old days when employers could divide and rule workers. If one worker can be unfairly sacked, that is a threat to others.
It has been suggested that lawyers should be brought into the tribunals, but they should not be allowed near them. The tribunals should be places—

Mr. Mellor: Mr. Mellor rose—

Mr. Martin: —where laymen—

Mr. Mellor: Will the hon. Gentleman give way?

Mr. Deputy Speaker: Order. The hon. Gentleman is not giving way.

Mr. Martin: The tribunals should be places where laymen from both sides of industry are able to take their grievances and have them heard fairly. There is enough work in the courts for lawyers without their being given the tribunals as well.
It is claimed that six months is not enough time in which to assess a worker. But a week, two weeks at the most, is enough time to assess whether a man is a decent worker. It does not say much for managerial techniques if a manager cannot tell whether a person is a good worker within six months.

1.16 a.m.

The Secretary of State for Employment (Mr. James Prior): Having heard the speeches of the hon. Members for Glasgow, Springburn (Mr. Martin) and for Hackney, North and Stoke Newington (Mr. Roberts), I am not surprised that it became impossible for the Labour Government to take any sensible action on the Employment Protection Act or on any other matter connected with industrial relations.
I regret that we should have found ourselves tonight arguing about what I would think the vast majority of the people outside, whether trade unionists, small employers or members of the general public, believe is a perfectly sensible and reasonable measure to take.
The evidence I have for saying that is this. In Committee on the Employment Protection Bill, when an amendment was moved to make the unfair dismissal procedure operate after 12 weeks, who voted

against it? The right hon. Member for Ebbw Vale (Mr. Foot) and the right hon. Member for Barrow-in-Furness (Mr. Booth). They argued that 52 weeks was the right period to choose. It was only at a subsequent stage of the Bill that they changed their minds and came down to 26 weeks.
We warned them at the time that if they wanted to achieve a reasonable balance between the fears of employers, particularly small employers, and the perfectly legitimate right of workers not to be unfairly dismissed, 26 weeks would not achieve it and would be bound to lead to problems of small employers at any rate not taking on labour.
On Second Reading of the Employment Protection Bill, we moved the following amendment:
this House, whilst recognising that parts of the Employment Protection Bill give legislative effect to good industrial practice, declines to give a Second Reading to a Bill which makes no attempt to establish a fair balance between the rights of management and unions, adds a heavy burden of cost without proper consideration of how it should be shared by employer, employee and State, and takes no account of the particular problems of small businesses."—[Official Report, 28 April 1975; V31. 891, c. 47.]
I think we were right then and I think that we are right now.
My hon. Friend the Member for Bridlington (Mr. Townend) talked with knowledge about the problems of small businesses and said that we should have moved back to 104 weeks, which was the original period that a Conservative Government introduced in the Industrial Relations Act 1971. I have a good deal of sympathy with him in that view.
Certainly, the weight of evidence that we had in the consultations was that 52 weeks was a fair balance. We are not trying to make the same mistakes as the Labour Government made when they introduced the legislation. We are not trying to tilt the balance in favour of one section of society. We are trying to have a fair balance between employers and. workers. I believe that 52 weeks is a very fair balance.
In the earlier debate the right hon. Member for Chesterfield (Mr. Varley) talked about unemployment. We are making the change in the order solely because in the difficult days ahead on employment, which the whole House


knows the country must face, we should do whatever we can not to make the task of employers more difficult.

Mr. James Hamilton: Exactly.

Mr. Prior: The hon. Gentleman and the whole House know that employers must spend more time in getting on with the job of production and selling. They must produce a standard of discipline and a standard of work that we in this country have not had in the past few years. We must do it in the interests of the country as a whole, with the co-operation of the workers.
Of course any Government, particularly a Government in office at a time of economic difficulty such as we shall experience in Britain in the next two years—[HON. MEMBERS: "Oh."] I suppose that no one has heard of the oil crisis. Any Government must seek the maximum co-operation, and that we shall do. We are putting the order through tonight because we believe that it is a small measure that can help with the provision of extra jobs.
My hon. Friend the Member for Grantham (Mr. Hogg) was abundantly right when he pointed out, with his experience of the law and of advising both employers and workers, that the payments made out of court were damaging to discipline and to the Act—

Mr. Eric S. Heffer: The right hon. Gentleman has used the word "discipline" twice.

Mr. Prior: —and have been a deterrent to employment.
I very much hope that the House will recognise that the order is designed to help with employment and is reasonable in terms of the balance of bargaining power between unions and workers on the one hand and employers on the other.
The right hon. Member for Doncaster (Mr. Walker) commented on surveys on the importance of the worker. One report said:
About a quarter"—
of those interviewed—
said when directly asked that the unfair dismissal provisions had affected the numbers recruited, and nearly half said that these had made them take more care in recruitment.

I have no doubt that that is a view that hon. Members on both sides of the House found during the election campaign and for a long time before that.

Mr. Heffer: How many more jobs, then, can we be guaranteed as a result of the order?

Mr. Prior: The hon. Gentleman knows that no one could guarantee how many more jobs would be created. But one thing of which one can be absolutely certain is that the effect of the Act in the past few years has been to lose a number of other jobs that we would have had. It is not good enough for the hon. Gentleman to produce that type of argument.

Mr. Harold Walker: I am sure that the Secretary of State does not wish to mislead the House about the Opinion Research Centre study. That study states that
24 per cent. said that they had been affected by the legislation on unfair dismissal, i.e. it had influenced them, though they may not necessarily have had experience of a complaint or threat of a complaint being made.

Mr. Prior: The fact that 24 per cent. of those who were interviewed said that they had been affected and influenced by the Employment Protection Act is good enough evidence to show that a large number of them might have taken on more labour had the 26-week period not applied. The hon. and learned Member for Leicester, West (Mr. Janner) referred to the period of 26 weeks as being too long. He could have argued that one day was too long—he probably would have argued that one day was too long. Even his Government did not reduce the period to less than 26 weeks, and the argument that he used to apply to 52 weeks would apply equally to 26, 13 or 6½ weeks.

Dr. McDonald: The right hon. Gentleman refers to 26 weeks as being a disadvantage. Will he explain why West German employers, who face a period of 26 weeks in which they have to assess an employee, are more discerning than British employers? Apparently they can assess an employee within that time, whereas British employers seem to take twice as long.

Mr. Prior: If the hon. Lady is suggesting that we should have similar industrial relations to those that apply in West Germany, many Conservative Members


would go along with the 26-week period for unfair dismissal. I have often heard Labour Members—no doubt it will be heard from the hon. Lady herself in the autumn—saying that we have to live and work in and adopt our methods to the country in which we live. Many of us have a great admiration for the way in which the West Germans manage their industrial relations. In this country we have closed shops. We do not have a rule that states that 70 per cent. of the workers have to vote by secret ballot before they can go on strike If the hon. Lady is suggesting that West German legislation should apply in this country, some of us might agree with her.
It is not only a question of unfair dismissal procedures operating after six months or even after a year. We recognise that the whole process of industrial tribunals has helped to cut down on the number of strikes which otherwise would be

caused by someone being unfairly sacked. However, we have to restore the confidence of management and small employers to take on labour and to be able to carry out their duties properly. In the last five years the ability of Britsh management to conduct its affairs properly has been undermined by parts of the Employment Protection Act. When we return after the recess we shall be asking the House to consider other measures that will deal with the Employment Protection Act. We shall consult fully on the measures before we introduce them.

In this order we are concerned to make a start in achieving a sensible balanced position between employer and employee, which is something that has been missing in this country for the past few years.

Question put:—

The House divided: Ayes 298, Noes 224

Division No. 80]
AYES
[1.30 a.m.


Adley, Robert
Chalker, Mrs. Lynda
Galbraith, Hon T. G. D.


Aitken, Jonathan
Channon, Paul
Gardiner, George (Reigate)


Alexander, Richard
Chapman, Sydney
Gardner, Edward (South Fylde)


Alison, Michael
Churchill, W. S.
Garel-Jones, Tristan


Ancram, Michael
Clark, Hon Alan (Plymouth, Sutton)
Glyn, Dr Alan


Arnold, Tom
Clark, William (Croydon South)
Goodhart, Philip


Aspinwall, Jack
Clarke, Kenneth (Rushcliffe)
Goodlad, Alastair


Atkinson, David (B'mouth East)
Clegg, Walter
Gorst, John


Baker, Kenneth (St. Marylebone)
Cockeram, Eric
Gower, Sir Raymond


Baker, Nicholas (North Dorset)
Colvin, Michael
Grant, Anthony (Harrow C)


Banks, Robert
Cope, John
Gray, Hamish


Beaumont-Dark, Anthony
Cormack, Patrick
Griffiths, Peter (Portsmouth N)


Beith, A. J.
Corrie, John
Grist, Ian


Bell, Ronald
Costain, A. P.
Grylls, Michael


Bendall, Vivian
Cranborne, Viscount
Gummer, John Selwyn


Benyon, Thomas (Abingdon)
Critchley, Julian
Hamilton, Hon Archie (Eps'm&amp;Ew'll)


Benyon, W. (Buckingham)
Crouch, David
Hamilton, Michael (Salisbury)


Best, Keith
Dean, Paul (North Somerset)
Hampson, Dr. Keith


Bevan, David Gilroy
Dickens, Geoffrey
Hannam, John


Biffen, Rt Hon John
Dodsworth, Geoffrey
Haselhurst, Alan


Biggs-Davison, John
Dorrell, Stephen
Hastings, Stephen


Blackburn, John
Douglas-Hamilton, Lord James
Havers, Rt Hon Sir Michael


Blaker, Peter
Dover, Denshore
Hawkins, Paul


Body, Richard
du Cann, Rt Hon Edward
Hawksley Warren


Bonsor, Sir Nicholas
Dunn, Robert (Dartford)
Hayhoe, Barney


Boscawen, Hon Robert
Durant, Tony
Heddle, John


Bottomley, Peter (Woolwich West)
Dykes, Hugh
Henderson, Barry


Bowden, Andrew
Eden, Rt Hon Sir John
Heseltine, Rt Hon Michael


Boyson, Dr Rhodes
Edwards, Rt Hon N. (Pembroke)
Hicks, Robert


Braine, Sir Bernard
Eggar, Timothy
Higgins, Terence L.


Bright, Graham
Emery, Peter
Hill, James


Brinton, Timothy
Eyre, Reginald



Brittan, Leon
Fairbairn, Nicholas
Hogg, Hon Dougles (Grantham)


Brocklebank-Fowler, Christopher
Fairgrieve, Russell
Holland, Philip (Carlton)


Brooke, Hon Peter
Faith, Mrs. Sheila
Hordern, Peter


Brown, Michael (Brigg &amp; Sc'thorpe)
Farr, John
Howell, Rt Hon David (Guildlord)


Browne, John (Winchester)
Fell, Anthony
Howell, Ralph (North Norfolk)


Bruce-Gardyne, John
Fenner, Mrs. Peggy
Hunt, David (Wirral)


Bryan, Sir Paul
Finsberg, Geoffrey
Hunt, John (Ravensbourne)


Buck, Antony
Fisher, Sir Nigel
Hurd, Hon Douglas


Budgen, Nick
Fletcher, Alexander (Edinburgh N)
Irving, Charles (Cheltenham)


Bulmer, Esmond
Fletcher-Cooke, Charles
Jenkin, Rt Hon Patrick


Butcher, John
Fookes, Miss Janet
Jessel, Toby


Butler, Hon Adam
Forman, Nigel
Johnson Smith, Geoffrey


Cadbury, Jocelyn
Fox, Marcus
Johnston, Russell (Inverness)


Carlisle, John (Luton West)
Fraser, Rt Hon H. (Stafford &amp; St)
Jopling, Rt Hon. Michael


Carlisle, Kenneth (Lincoln)
Fraser, Peter (South Angus)
Kaberry, Sir Donald


Carlisle, Rt Hon Mark (Runcorn)
Fry, Peter
Kellett-Bowman, Mrs Elaine




Kershaw, Anthony
Murphy, Christopher
Spicer, Jim (West Dorset)


Kimball, Marcus
Myles, David
Spicer, Michael (S Worcestershire)


King, Rt Hon Tom
Neale, Gerrard
Sproat, Iain


Kitson, Sir Timothy
Nelson, Anthony
Squire, Robin


Knight, Mrs Jill
Neubert, Michael
Stainton, Keith


Knox, David
Newton, Tony
Stanbrook, Ivor


Lamont, Norman
Normanton, Tom
Stanley, John


Lang, Ian
Onslow, Cranley
Steen, Anthony


Langford-Holt, Sir John
Oppenheim, Rt Hon Mrs Sally
Stevens, Martin


Lawrence, Ivan
Osborn, John
Steward, Ian (Hitchin)


Lawson, Nigel
Page, John (Harrow, West)
Stewart, John (East Renfrewshire)


Lee, John
Page, Rt Hon R. Graham (Crosby)
Stokes, John


Lennox-Boyd, Hon Mark
Parris, Matthew
Stradling Thomas, J.


Lester, Jim (Beeston)
Patten, Christopher (Bath)
Tapsell, Peter


Lewis, Kenneth (Rutland)
Patten, John (Oxford)
Taylor, Robert (Croydon NW)


Lloyd, Peter (Fareham)
Pattie, Geoffrey
Tebbit, Norman


Loveridge, John
Pawsey, James
Temple-Morris, Peter


Luce, Richard
Penhaligon, David
Thompson, Donald


Lyell, Nicholas
Percival, Sir Ian
Thorne, Neil (Ilford South)


McCrindle, Robert
Pink, R. Bonner
Thornton, George


Macfarlane, Neil
Pollock. Alexander
Townend, John (Bridlington)


MacGregor, John
Porter, George
Townsend, Cyril D. (Bexleyheath)


Mackay, John (Argyll)
Price, David (Eastleigh)
Trippier, David


Macmillan, Rt Hon M. (Farnham)
Prior, Rt Hon James
Trotter, Neville


McNair-Wilson, Michael (Newbury)
Proctor, K. Harvey
van Straubenzee, W. R.


McNair-Wilson, Patrick (New Forest)
Pym, Rt Hon Francis
Vaughan, Dr Gerard


McQuarrie, Albert
Rathbone, Tim
Viggers, Peter


Madel, David
Rees, Peter (Dover and Deal)
Waddington, David


Major, John
Rees-Davies, W. R.
Wakeham, John


Marland, Paul
Renton, Tim
Waldegrave, Hon William


Marlow, Antony
Rhodes James, Robert
Walker-Smith, Rt Hon Sir Derek


Marshall, Michael (Arundel)
Rhys Williams, Sir Brandon
Wall, Patrick


Marten, Neil (Banbury)
Ridsdale, Julian
Waller, Gary


Mates, Michael
Rifkind, Malcolm
Walters, Dennis


Mather, Carol
Roberts, Michael (Cardiff NW)
Ward, John


Maude, Rt Hon Angus
Ross, Stephen (Isle of Wight)
Warren, Kenneth


Mawby, Ray
Rost, Peter
Watson, John


Mawhinney, Dr Brian
Royle, Sir Anthony
Wells, John (Maidstone)


Mayhew, Patrick
Sainsbury, Hon Timothy
Wells, P. Bowen (Hert'fd&amp;Stev'nage)


Mellor, David
St. John-Stevas, Rt Hon Norman
Wheeler, John


Meyer, Sir Anthony
Scott, Nicholas
Whitelaw, Rt Hon William


Miller, Hal (Bromsgrove &amp; Redditch)
Shaw, Michael (Scarborough)
Whitney, Raymond


Mills, lain (Meriden)
Shelton, William (Streatham)
Wickenden, Keith


Mills, Peter (West Devon)
Shepherd, Colin (Hereford)
Wiggin, Jerry


Miscampbell, Norman
Shepherd, Richard(Aldridge-Br'hills)
Wilkinson, John


Mitchell, David (Basingstoke)
Shersby, Michael
Winterton, Nicholas


Moate, Roger
Silvester, Fred
Wolfson, Mark


Monro, Hector
Sims, Roger
Young, Sir George (Acton)


Montgomery, Fergus
Skeet, T. H. H.
Younger, Rt Hon George


Moore, John
Smith, Dudley (War. and Leam'ton)



Morris, Michael (Northampton, Sth)
Speed, Keith
TELLERS FOR THE AYES:


Morrison, Hon Charles (Devizes)
Speller, Tony
Mr. Spencer le Marchant and


Morrison, Hon Peter (City of Chester)
Spence, John
Mr. Anthony Berry.




NOES


Adams, Allen
Concannon, Rt Hon J. D.
Eadie, Alex


Allaun, Frank
Conlan, Bernard
Eastham, Ken


Anderson, Donald
Cook, Robin F.
Edwards, Robert (Wolv SE)


Archer, Rt Hon Peter
Cowans, Harry
Ellis, Raymond (NE Derbyshire)


Armstrong, Ernest
Cox, Tom (Wandsworth, Tooting)
Ellis, Tom (Wrexham)


Ashton, Joe
Craigen, J. M. (Glasgow, Maryhill)
English, Michael


Atkinson, Norman (H'gey, Tott'ham)
Crowther, J. S.
Ennals, Rt Hon David


Bagier, Gordon A. T.
Cryer, Bob
Evans, loan (Aberdare)


Barnett, Guy (Greenwich)
Cunliffe, Lawrence
Evans, John (Newton)


Barnett, Rt Hon Joel (Heywood)
Cunningham, George (Islington S)
Ewing, Harry


Benn, Rt Hon Anthony Wedgwood
Dalyell, Tam
Faulds, Andrew


Bennett, Andrew (Stockport N)
Davidson, Arthur
Field, Frank


Booth, Rt Hon Albert
Davies, Rt Hen Denzil (Llanelli)
Flannery, Martin


Boothroyd, Miss Betty
Davies, E. Hudson (Caerphilly)
Fletcher, Ted (Darlington)


Bradley, Tom
Davies, Ifor (Gower)
Foot, Rt Hon Michael


Brown, Hugh D. (Provan)
Davis, Clinton (Hackney Central)
Forrester, John


Brown, Robert C. (Newcastle W)
Davis, Terry (B'rm'ham, Stechford)
Fraser, John (Lambeth, Norwood)


Brown, Ronald W. (Hackney S)
Deakins, Eric
Freeson, Rt Hon Reginald


Buchan, Norman
Dean, Joseph (Leeds West)
Freud, Clement


Callaghan, Jim (Middleton &amp; P)
Dempsey, James
Garrett, John (Norwich S)


Campbell, Ian
Dixon, Donald
George, Bruce


Campbell-Savours, Dale
Dobson, Frank
Gilbert, Rt Hon Dr John


Cant, R. B.
Dormand, J. D.
Ginsburg, David


Carmichael, Nell
Douglas-Mann, Bruce
Golding, John


Cartwright, John
Dubs, Alfred
Graham, Ted


Clark, Dr David (South Shields)
Duffy, A. E. P.
Grant, George (Morpeth)


Cocks, Rt Hon Michael (Bristol S)
Dunn, James A. (Liverpool, Kirkdale)
Grant, John (Islington C)


Cohen, Stanley
Dunnett, Jack
Hardy, Peter


Coleman, Donald
Dunwoody, Mrs Gwyneth
Harrison, Rt Hon Walter







Hattersley, Rt. Hon Roy
Martin, Michael (Gl'gow, Springb'n)
Silkin, Rt Hon John (Deptford)


Haynes, David
Mason, Rt Hon Roy
Silkin, Rt Hon S. C. (Dulwich)


Healey, m. Hon Denis
Maxton, John
Silverman, Julius


Heffer, Eric S.
Maynard, Miss Joan
Skinner, Dennis


Hogg, Norman (E Dunbartonshire)
Meacher, Michael
Smith, Rt Hon J. (North Lanarkshire)


Holland, Stuart (L'beth, Vauxhall)
Mikardo, Ian
Snape, Peter


Home Robertson, John
Millan, Rt Hon Bruce
Soley, Clive


Homewood, William
Miller, Dr M S (East Kilbride)
Spearing, Nigel


Hooley, Frank
Mitchell, Austin (Grimsby)
Spriggs, Leslie


Horam, John
Mitchell, R. C. (Soton, Itchen)
Stallard, A. W.


Howell, Rt Hon Denis (B'ham, Sm H)
Morris, Rt Hon Alfred (Wythenshawe)
Stoddart, David


Huckfield, Les
Morris, Rt Hon Charles (Openshaw)
Stott, Roger


Hughes, Mark (Durham)
Morris, Rt Hon John (Aberavon)
Strang, Gavin


Hughes, Robert (Aberdeen North)
Morton, George
Straw, Jack


Janner, Hon Greville
Moyle, Rt Hon Roland
Taylor, Mrs Ann (Bolton West)


Jay, Rt Hon Douglas
Mulley, Rt Hon Frederick
Thomas, Jeffrey (Abertillery)


Johnson, James (Hull West)
Newens, Stanley
Thomas, Mike (Newcastle East)


Johnson, Walter (Derby South)
Oakes, Gordon
Thomas, Dr Roger (Carmarthen)


Jones, Alec (Rhondda)
Ogden, Eric
Thorne, Stan (Preston South)


Jones, Dan (Burnley)
O'Halloran, Michael
Tilley, John


Kilroy-Silk, Robert
O'Neill, Martin
Torney, Tom


Kinnock, Neil
Orme, Rt Hon Stanley
Urwin, Rt Hon Tom


Lambie, David
Owen, Rt Hon Dr David
Varley, Rt Hon Eric G.


Lam born, Harry
Palmer, Arthur
Walker, Harold (Doncaster)


Lamond, James
Park, George
Weetch, Ken


Leadbitter, Ted
Parker, John
Wellbeloved, James


Leighton, Ronald
Parry, Robert
Welsh, Michael


Lestor, Miss Joan (Eton &amp; Slough)
Powell, Raymond (Ogmore)
White, Frank R. (Bury &amp; Radcliffe)


Lewis, Arthur (Newham North West)
Prescott, John
White, James (Glasgow, Pollok)


Lewis, Ron (Carlisle)
Price, Christopher (Lewisham West)
Whitehead, Phillip


Lofthouse, Geoffrey
Race, Reg
Whitlock, William


Lyon, Alexander (York)
Radice, Giles
Willey, Rt Hon Frederick


Lyons, Edward (Bradford West)
Rees, Rt Hon Merlyn (Leeds South)
Williams, Rt Hon Alan (Swansea W)


Mabon, Rt Hon Dr J Dickson
Richardson, Miss Jo
Williams, Sir Thomas (Warrington)


McDonald, Dr Oonagh
Roberts, Albert (Normanton)
Wilson, Gordon (Dundee East)


McElhone, Frank
Roberts, Ernest (Hackney North)
Wilson, Rt Hon Sir Harold (Huyton)


McKay, Allen (Penistone)
Roberts, Gwllym (Cannock)
Wilson, William (Coventry SE)


MacKenzie, Rt Hon Gregor
Robertson, George
Winnick, David


Maclennan, Robert
Robinson, Geoffrey (Coventry NW)
Woodall, Alec


McMillan, Tom (Glasgow, Central)
Rodgers, Rt Hon William
Woolmer, Kenneth


McNally, Thomas
Rooker, J. W.
Wrigglesworth, Ian


McNamara, Kevin
Roper, John
Wright, Miss Sheila


Magee, Bryan
Ross, Ernest (Dundee West)
Young, David (Bolton East)


Marks, Kenneth
Rowlands, Ted



Marshall, David (Gl'sgow, Shettles'n)
Sever, John
TELLERS FOR THE NOES:


Marshall, Dr Edmund (Goole)
Sheerman, Barry
Mr. James Hamilton and


Marshall, Jim (Leicester South)
Sheldon, Rt Hon Robert (A'ton-u-L)
Mr. James Tinn.

Question accordingly agreed to.

Resolved,
That the draft Unfair Dismissal (Variation of Qualifying Period) Order 1979, which was laid before this House on 10th July, be approved.

SELECT COMMITTEES RELATED TO GOVERNMENT DEPART MENTS

Motion made, and Question proposed,
That the Standing Order (Select Committees related to Government Departments) be amended, in the Table, column 4 (Maximum numbers of Members), in respect of the Defence Committee, the Energy Committee, the Environment Committee, and the Transport Committee, by leaving out '10' and inserting '11', instead thereof.—[Mr. Wakeham.]

Mr. Deputy Speaker (Mr. Bernard Weatherill): The Question is the motion in the name of the Chancellor of the Duchy of Lancaster. As many of that opinion say "Aye". To the contrary, "No".

Mr. Ronald W. Brown: I put down an amendment on this item calling for the addition of the other four Select Committees, to change them from nine-member Committees to 11-member Committees in the same way. Am I not to be called on my manuscript amendment?

Mr. Deputy Speeket: I know that the hon. Member has submitted a manuscript amendment, which has been selected by Mr. Speaker, but I was putting the Question first. Now, will the hon. Member move his amendment?

Mr. Ronald W. Brown: I have chosen to move my amendment, after "11", insert
and in respect of the Agriculture Committee, the Education, Science and Arts Committee, the Employment Committee, and the Social Services Committee, by leaving out '9' and inserting '11'"—

It being after Ten oclock on Tuesday evening, and objection being taken to further proceeding, the debate stood adjourned.

Debate to be resumed this day.

MEMBERS' INTERESTS

Motion made,
That Mr. Robert Adley, Mr. Joe Ashton, Mr. Andrew Bennett, Mr. R. B. Cant, Mr. Geoffrey Dodsworth, Mr. Tony Durant, Sir Nigel Fisher, Mr. Percy Grieve, Mr. Geoffrey Johnson Smith, Mr. David Madel, Mr. Charles R. Morris, Mr. Arthur Palmer, and Mr. Frederick Willey, be members of the Select Committee on Members' Interests.—[Mr. Wakeham.]

Hon. Members: Object.

PETITION

Nursery Education

1.42 a.m.

Mr. D. N. Campbell-Savours: With your permission, Mr. Deputy Speaker, and that of the House, I wish to present a petition, which reads:
To the honourable the Commons of the United Kingdom of Great Britain and Nortnern Ireland in Parliament assembled—
The humble Petition of citizens of the United Kingdom sheweth—
That the honourable Member for Workington has received a Petition signed by more than seventeen thousand residents of West Cumbria who are concerned by proposals that nursery education should be subject to severe cutbacks, and that many people in West Cumbria are gravely concerned at the disastrous effect of these cuts on the young children of the area.
Wherefore your Petitioners pray that Your honourable House impress upon Her Majesty's Government the need to preserve and extend provision for nursery education in West Cumbria and elsewhere in Britain, and that Your honourable House do not pass any legislation which will have the effect of diminishing that provision.
And your Petitioners, as in duty bound, will ever pray, &amp;c.
This petition stems from a fear among my constituents that cuts in public expenditure will affect the provision of nursery education in my constituency.

To lie upon the Table.

GLASGOW (POPULATION CHANGES)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wakeham.]

1.45 a.m.

Mr. Hugh D. Brown: I am not sure whether we have now cleared away all the procedural difficulties which the House apparently has to face these days, but I am delighted that the Under-Secretary of State is here from the Scottish Office. I am a little surprised that no one has commented on the fact that the Scottish Office is working a Minister short compared with what we used to do. I do not want a reply on that, because the hon. Gentleman will perhaps argue that the quality has changed as well. I merely say that I recognise that it is sometimes inconvenient to be here at this time of the morning. For what it is worth, I can tell the Minister that, including my three previous Adjournment debates, this is about the earliest I have managed.
As I was forced to go back to look at what I had said on those occasions, I found it interesting, and not surprising, that the three subjects I raised related to Easterhouse, to Scottish housing and the Cullingworth report, and in 1970 to a report from the Scottish Housing Advisory Committee entitled "Council House Communities". Again tonight I am on a similar subject, the problems facing the peripheral areas of Glasgow.
The Minister knows the report, "Glasgow: Implications of Population Changes to 1983". I do not think that there is anything between the parties on the background and analysis. Ultimately, there was common ground with the district council, the regional council and the SDD. That all-party recognition of the problem, to call it that, probably first emerged in 1972, when the late Robert Mansley, the director of planning in Glasgow, produced for the council his report "Areas of Need in Glasgow". On page 4 of that report, he drew attention to the fact that
Co-ordinated action, involving many Committees and Departments of the Corporation, is needed, and the very high level of expenditure necessary will illustrate that the Government's recent offer of finance for a form of 'first-aid' environmental improvement becomes


virtually irrelevant to the scale of the problem to be tackled.
I do not suggest for one moment that the previous Government were able to provide resources on the scale which Glasgow always thought should be provided. I do not argue that problems have suddenly emerged of which we have not been aware over many years. But from the SDD report, paragraph 23 on page 17, it is clear that in the past, as I say, there was general recognition of the scale of the problem, although, for obvious reasons, there was never agreement about the scale of resources needed to tackle it in the terms now presented by the report on the implications of population changes to 1983.
There has been general agreement and all-party recognition of the figures: that Glasgow is continuing to lose 25,000 of its population a year, that by 1981 there could be 25,000 houses empty and by 1983 there could be 30,000 houses empty. That is the size of the problem confronting Glasgow and Strathclyde in that context.
We therefore need an assurance from the Government. This is the first opportunity that the Minister has had to speak on the subject, since Glasgow was not even mentioned in the debate last week. I do not blame the Minister for that, and I had better not say anything about the selection by the Chair or I shall be in further trouble. But it was unfortunate that no voice was heard raising these issues, and this Adjournment debate is therefore pretty timely.
I now draw the Minister's attention—I am sure that he will be warned of it—to what was said in the Evening Times on 27 June by Bailie Derek Mason. Dealing with the need to face up to the financial crisis which he sees as more or less permanently facing Glasgow—perhaps somewhat exaggeratedly—he said:
It is the intention of the Conservative administration to give the Government such detailed information about Glasgow that, rather than cut any assistance, they will be prepared to treat us as a special case.
We are all familiar with how special cases can be built up. The Minister will be fully aware that there will be special pleading when he meets the representatives of Glasgow in the near future.
The Minister should also be aware that I am not just arguing about the peri-

pheral areas. I also seek an assurance about the future of the GEAR programme. When the first cuts in public expenditure were intimated, there was a statement by one of these anonymous Scottish Office officials—the type of statement that seems to be made at weekends. I confess that I always shuddered when I read them when I was in Government and said "I wonder who on earth made that one". This was well up to standard, displaying the classic approach that seems to emerge from time to time. It dealt with the question:
Will the GEAR programme be affected?
The answer was:
Yes, but it will maintain its relative priority.
As I understand that, it means, in ordinary layman's language, "If everyone else is to get cut back, so will the GEAR programme". Perhaps the Minister will explain.
I should like some assurance that the urban aid programme will continue at its present level. This is entirely within the control of the Government. Will that, too, be affected?
I put my next question in the context of Easterhouse and of one scheme in particular, at Garthamlock. As the Minister will know, in the housing management report for last year, at page 70, the district council, accepting the need for action following on the report dealing with the implications of population changes, said that it had set up what it called an
Environmental Revitalisation Officer to prepare a brief which is developed with the assistance of a local community and which balances the requirements of the city with the needs of the existing population in an area. The point has been reached where the emerging surplus of dwellings in Glasgow is beginning to be apparent in certain areas.
On page 71 there is recognition of this because there is reference to the preparation of briefs covering five areas—Drumchapel, Garthamlock, which is in my constituency, Priesthill, Lochend, again in my constituency, and Pollok. This is part of the general recognition of the need to do something about these peripheral areas. The briefs in preparation cover over 7,000 houses in these five areas.
The importance of that reference is that it raises expectations in a community. It is all right for us to say "But there was


no commitment given that there would be £X million forthcoming." Here we have large communities, and no one can deny that a lot of effort is needed.
I refer again to Garthamlock. Its description is the classic description of a deprived area. A total of 70 per cent. of its residents want to leave it; 44 per cent. of residents have submitted a transfer application form; 32 per cent. wish to leave because of violence and vandalism. There is no sheltered housing in the area. There is a high rate of abscondencies in a year—about 130 out of a total of 1,600 households. Ten per cent. of all households are single-parent families. Unemployment is exceptionally high, with almost 50 per cent. of economically active males unemployed. Car ownership is only 6.5 per cent. of the population.
All the classic indices of a deprived area are set out there in one small part of the so-called Easterhouse township. Yet the Government apparently feel that the selling of council houses is a panacea that will solve all these complex problems. There is some inconsistency here.
The Government's circular of 20 June gives local authorities more discretion. They are no longer required to submit detailed housing projects for approval. I welcome that continuation of our policy, but if the Government believe in it why are they taking such a rigid and doctrinaire attitude to the selling of council houses?
The Prime Minister admitted today that there would have to be some discretion—that, for example, houses in national parks, and tied cottages, might be exempt. I hope that the Minister will not reply too dogmatically and that I am being helpful when I say that I shall seek exemptions in areas of need, where the problems will not be solved with a blanket approach and which need a changed approach to the size, style and layout of houses.
Does this mean—I do not necessarily expect an answer tonight—that there will at least be consultations with local authorities to determine, as the Minister has apparently done with the SSHA, that houses due for imminent modernisation should be excluded from sale? That is a practical problem in some areas. If the expectation of a substantial injection

of public money has been raised, might that not enhance the value of an area and allow the argument about selling council houses to continue?
I know that I am raising fundamental questions, but I was not happy with the Minister's attempt in the Scottish Grand Committee on Thursday to justify this policy on financial grounds. I am not now talking about social policy. Of course I believe in extending owneroccupation—I wish we could go into that tonight—but I am not satisfied with his explanation.
This seems like a short-term advantage, like someone selling his gas fire to pay for his summer holiday because he will not need heating until the autumn. That may be an unfair analogy, but the Scottish Office will be forced to seek short-term gains in public expenditure because of the pressure on it to make its contribution to the savage cuts dictated by the Cabinet.
We must consider whether we are not storing up long-term financial trouble. I do not always agree with Shelter—the Minister probably has had more responsibility for that organisation than I ever had—but many arguments in its document on this subject should be taken seriously.
It might be worth while if the proposed Scottish Select Committee considered the arguments on this matter. I warn the Minister—I am not threatening him—that there are areas of discontent. People know that one reason for involving them in this exercise is to enable someone to build a new shooting lodge in the Highlands when nothing is done about houses that are not of a tolerable standard. In other words, the tax relief to those who are earning well over £10,000 is colossal compared with the experience of many of our constituents who will suffer because of the Government's approach.
The Government should take on board that in the summer of discontent that will undoubtedly be theirs there is a need to pause and reflect before they return to this place in the autumn with legislation that they now think they can steamroller through the House merely because they have a parliamentary majority. It is not enough merely to have a majority. There must be social consensus or the right state of mind in the areas where Government


policy will bite. I argue that the Government's policies will not be accepted in the areas that I have described.
When reading the report of the Royal Commission on the National Health Service, 1 was struck by paragraph 2.3 of chapter 2, which states:
It is a wry comment on the way of life in developed countries that we now pay more attention to the diseases of affluence than we do those of deprivation.
In the years ahead the Government may be accused of adopting that approach on housing policy. The Government should not overlook the less fortunate in society. I am talking about an area that has colossal social problems. The problems will not be solved by an extension of urban aid contributions. Something much broader is required for Glasgow, which has at least started working on a scheme.
I appeal to the Minister to bear in mind that we need to put a great deal of effort, and be seen to be putting a great deal of effort, into large schemes in Glasgow at Drumchapel, Castlemilk, Easterhouse and Pollok. I appeal to the Government to proceed cautiously and not to be too doctrinaire. If they assess the problems, they will surely accept that it is necessary to spend more money and devote more energy to the difficult areas.

2.2 a.m.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): The hon. Member for Glasgow, Provan (Mr. Brown) has ranged rather wide in his remarks, but it is highly desirable that he should have introduced a debate on the report on the implications of population changes in Glasgow. The report was especially welcomed as it followed one of the few occasions when there was close, useful and productive liaison between district and regional authorities. That has produced a good result which will be to the benefit of the community that the authorities serve. As the hon. Gentleman knows, the Scottish Office contributed to the report. It is an example of a degree of co-operation and liaison that is clearly helpful.
The hon. Gentleman mentioned some dramatic conclusions contained in the report, especially the likely continuing drastic reduction in the population of Glasgow over the next few years. As the hon. Gentleman will be aware, the

report concluded that on current trends the population of Glasgow from 1977 to 1983 will decline from the present 830,000 to between 714,000 and 770,000. That will be a substantial fall. As the hon. Gentleman indicated, one of the most dramatic conclusions concerns the housing implications. By 1983 there could be between 11,000 and 29,000 empty houses in Glasgow. That is a dramatic figure and one that calls for the most serious consideration by local authorities and by all who are concerned with the quality of housing in Glasgow, the implications of changing circumstances and the policies that should be pursued to deal with them.
As the hon. Gentleman is aware, the report indicates that a high proportion of the vacant houses may prove impossible to let. It may prove impossible to find people who are prepared to live in them. These houses are concentrated in the peripheral areas, especially in the four estates of Castlemilk, Pollok, Drumchapel and Easterhouse.
It is interesting that the report indicated why it was believed that the vacancies would be concentrated in those areas. It pointed to the poor quality and lack of variety of housing in those areas, the poor environment, the shortage of social facilities, the high level of unemployment, the lack of convenient employment opportunity, poor public transport, a significant degree of vandalism, arid a high crime rate. It is obvious that where there is a concentration of these factors in a specific area the social consequences for the housing of that area and the related problems that go with it can be very serious.
The hon. Member referred to Garthamlock. In addition to the statistics he mentioned, one is conscious of the fact that fully 9 per cent. of the properties in Garthamlock are vacant. That is for 1977, and one can only be apprehensive as to what the consequences in 1983 might be if that trend continues.
Concerning expenditure to deal with this problem, the hon. Member—indeed, the House as a whole—will be aware that the policy of the last Government, which this Government are pursuing, is that it is ultimately for local authorities to determine, within the expenditure available to them, the priorities that they will apply to deal with local problems. While the Secretary of State is obviously con-


cerned and takes the decision as to the overall amount of expenditure available, it would not be right, desirable or possible for him to dictate the specific way in which that expenditure is to be allocated.
The hon. Member, quite correctly, reminded the House that of course the problems of the peripheral areas have to be related to the other problems in Glasgow, particularly the inner city difficulties and the GEAR project. He asked for an indication as to the future of the GEAR project and poured some scorn on what he chose to call anonymous weekend statements. I am not sure whether they were weekend statements but they certainly were not anonymous, because I made them myself and am quite happy to admit authoriship of at least a certain proportion of them.
The hon. Member referred to what he considered to be the difficulty of understanding what might be meant by maintaining the same degree of priority. Perhaps I can explain the phrase in this way. Obviously, if there are expenditure restraints affecting Glasgow and Strathclyde region, it is possible that there will be less cash available in the GEAR area. But what the Government have indicated is that they would hope that the same degree of priority that is presently given to the GEAR project within the expenditure available to Strathclyde region, to Glasgow district and to the other authorities involved in the GEAR project should be allocated to the GEAR project, whatever the total amount of available resources might be.
The hon. Member also asked for a statement from me this evening as to the future of the urban aid programme. I can indicate to the hon. Member that in regard to Glasgow and the West of Scotland area the urban aid programme will. of course, continue. Indeed, it is likely to have in the next year a level of resources comparable to that which it enjoys in the current year. I am not suggesting that it will be mathematically exactly the same, but the overall level of resources available to the local authorities out of the urban aid programme is unlikely to be significantly different in the forthcoming year.
The hon. Member ranged quite considerably over the problem of the sale of council houses and related this to the difficulties in Glasgow and the housing problems of the peripheral areas.
The Government have never suggested that the sale of council houses will in some way be a panacea for all the housing problems of the hon. Member's constituency, much less of Scotland as a whole. We see that policy as relating to an expressed demand from many council tenants throughout Scotland and as playing a part in dealing with the housing problems of Scotland, but obviously the problems to which the hon. Member has referred go beyond the simple question of the form of tenure, and the Government have never suggested otherwise.
The hon. Member asked specifically whether there would be exempted categories in regard to the statutory right to purchase that we shall give to tenants. As my right hon. Friend the Prime Minister indicated earlier today, there will, of course, be exempted categories, but I must emphasise that these exempted categories will amount to a very small proportion of the total public housing stock. It will be our policy to give a statutory right to buy to public sector housing tenants, and although there may be one or two exemptions the hon. Member should not conclude that they will relate to other than a small proportion of housing available.
The hon. Gentleman asked whether we would have consultations with the local authorities on the question of the sale of council houses. I can answer him by saying that we have indicated to COSLA and to the Scottish local authorities that we will certainly be willing to discuss with them the details of the policy of the sale of council houses. We do not consider it appropriate to have discussions or consultations on the general principle whether tenants should have a statutory right to buy, but we will certainly be happy to discuss with them—indeed, a meeting has already been arranged which I shall attend—the detailed implementation of these proposals. If they have specific suggestions to put forward, we shall, of course, be happy to give full consideration to them.
The hon. Gentleman emphasised that in his view any financial benefits that


might result from the policy of the sale of council houses would be essentially short-term benefits and that this should not be the basis of the Government's policy. Let me make it quite clear—obviously we shall have plenty of opportunity in future months to discuss this in greater detail—that the fundamental reason why the Government are embarking on this policy is not financial. It is the social factor.
We believe that in Scotland in particular there is an overwhelming need radically to expand the level of home ownership. Indeed, I hope I pay the hon. Gentleman a tribute in saying that I think he recognised that when he was the Minister responsible for these matters. I think that he sought to educate some of his own hon. Friends of the need in Scotland compared with the rest of the United Kingdom, and particularly compared with other parts of Western Europe, to change the depressing legacy of past years and to have a radical expansion in this sphere. He knows that the private sector alone cannot meet that target and that a significant proportion must come from the sale of existing houses in the public sector.
I return to the specific point of the consequences of the likely decline in population in Glasgow, the hon. Gentleman's constituency and in other peripheral areas. In general terms, we can perhaps draw two conclusions from what has been experienced and what is being experienced at the present time. First, it calls for the local authorities in particular, but also everyone concerned with the welfare of Glasgow and Scotland in general, to re-examine the whole future of the public sector as regards those parts of the public sector housing stock that will remain in the public sector, notwithstanding the Government's policy. Obviously, large numbers of houses, particularly in the kind of estate which the hon. Gentle-

man represents, will at the end of the day remain public sector housing. Clearly the appropriate course must be to consider all possible ways of ensuring that houses are occupied. In some cases that will mean selling, if not to sitting tenants—if there are no sitting tenants—perhaps on the open market to anyone who may wish to live in them. It will perhaps involve consideration of underletting in areas that would not otherwise have property occupied. It may involve changing the kind of tenure that is available in those areas. One must have a maximum, flexible approach to ensure that at least the houses are occupied. The way in which they come to be occupied is a lesser consideration if we are to avoid the major problem of gross and massive derelict areas in our cities.
The other general point is that, by contrasting the needs of the peripheral areas with those of the inner urban areas, the report highlights the present absence of a comprehensive plan for Glasgow. There is no such plan. There are some extremely good analyses of particular problems. There are some very good recommendations in respect of the peripheral areas. There are other organisations and bodies concerned with the inner areas or with the GEAR project. But what we have not had up to now is a more comprehensive approach, whereby the local authorities and others concerned with the future of Glasgow are able to present in a single set of proposals an analysis, suggested remedy and suggested degree of priorities for the rehabilitation of the city—

The Question having been proposed after Ten o'clock on Tuesday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at fourteen minutes past Two o'clock.